Sectoral Analysis of BSE-Listed Companies. Macroeconomic Impacts and Economic Contribution in Pre- and Post-COVID India

Research Paper (undergraduate) , 2024 , 128 Pages , Grade: A

Business economics - Banking, Stock Exchanges, Insurance, Accounting

This research provides a sector-specific analysis of companies listed under the Bombay Stock Exchange (BSE), focusing on how various macroeconomic factors—particularly GDP, inflation, and share price recovery before and after the COVID-19 pandemic—have influenced sectoral performance and market capitalization. The study aims to investigate the economic contribution of different sectors to India’s GDP and assess how effectively these sectors have adapted to inflationary pressures and market disruptions.

By examining empirical data, the study seeks to identify key trends, sector-specific challenges, and opportunities for improving market efficiency and resilience. It also analyses the correlation between macroeconomic variables and sectoral growth within the BSE, offering actionable insights for policymakers, investors, and corporate strategists. In doing so, it highlights how companies maintain profitability and cost-efficiency despite volatile conditions, while also contributing to national economic development.

Ultimately, the objective is to deepen the understanding of how sector-specific dynamics within the BSE ecosystem interact with broader economic indicators, thereby supporting more informed investment and policy decisions.

TABLE OF CONTENTS

ABSTRACT…

1. INTRODUCTION
1.1 The Bombay Stok Exchange
1.2 Need for the Study
1.3 Scope of the Study
1.4 Limitations of the Study

2. REVIEW OF LITERATURE
2.1 Research Gap
2.2 Objectives of the Study
2.3 Hypothesis

3. RESEARCH METHODOLOGY

4. COMPANY PROFILE
4.1 Retail Sector
4.2 IT Sector
4.3 Finance Sector

5. DATA ANALYSIS AND INTERPRETATION
5.1 To know how sectors contribution to India’s GDP…
5.2 To know how average inflation affected various sectors performance
5.3 To know how share prices reflected pre and post COVID-19

6. FINDINGS AND SUGGESTIONS
6.1 Findings …
6.2 Suggestions ….…
6.3 Conclusions

SCOPE FOR FURTHER RESEARCH…

REFERENCES

ABSTRACT

This research explores sector specific analysis on stock market growth and economic contributions prioritising the companies listed under the Bombay Stock Exchange (BSE) with a key focus on macroeconomic factors like GDP, Inflation and Share price recoverance pre and post COVID. This study examines the Bombay Stock Exchange (BSE) economic contribution, focusing on sectoral performance, market capitalization and GDP Impact. It highlights trends, challenges and opportunities offering insights for enhancing market efficiency and economic growth by analysing the quantitative data, this research aims to provide insights into how various sectors under BSE, contributed to the GDP of India over the past and recent years.

It aims to understand how the rising Inflation as affected the performance of various sectors and how market capitalization was affected because of the pandemic. Its significance lies in how well the sectors are managing to control their costs and still attain profitability while also contributing economically in spite of the hyperinflation rates in India and also due to the COVID-19 outbreak. By evaluating how these indicators of macroeconomic factors impact various sectors under BSE, this study aims to achieve a deeper understanding of various market dynamics. This study also identifies trends and correlation between various variables involved under the research and how they influence the market trends.

This research is crucial in understanding the sectoral performance under various macroeconomic factors, their conditions and how well they are contributing to the Indian economy over the years. The findings are expected to aid the companies in making informed decisions related to specific sectors that have been taken for the research. This study also highlights the need for said research and the potential for future research gaps and suggestions.

KEYWORDS: Sectoral performance, Bombay Stock Exchange, COVID-19, Economic contribution, Cost recovery, Profitability.

1. Introduction

1.1 The Bombay Stock Exchange-BSE

The Bombay Stock Exchange (BSE), established in 1875, is among the oldest and most powerful stock exchanges in India. It plays a central role in the growth and development of the Indian economy through its functioning as a medium for the selling and purchasing of stocks and securities. Being a key indicator of economic well-being, the BSE is the reflection of the performance of different sectors and how economic, political, and social considerations affect individual industries in the nation. Sector-specific analysis on the BSE is important to understand in order to grasp the nature of stock market expansion and the overall economic contribution that various sectors provide to the development of India.

The Importance of Sector-Specific Analysis

In India, the economy is extremely diversified, and every sector acts differently under internal and external factors. These sectors, such as banking, information technology (IT), pharmaceuticals, energy, consumer goods, and infrastructure, among others, contribute in varying ways to the overall market performance and economic output. Sector-specific analysis attempts to analyse the performance of specific industries by analysing their stock price movements, growth trends, risks, profitability, and overall contribution to market indices such as the BSE Sensex.

Every industry in the BSE has distinct features, which are determined by consumer demand, technological developments, regulatory environments, government policies, and macroeconomic conditions. For example, the Indian IT industry has been a steady performer, fuelled by outsourcing trends, technology innovation, and increasing global demand for software and services. Conversely, the healthcare industry derives advantages from both domestic demand for healthcare and export demand from abroad, especially with India as a leading international supplier of generic medication. However, industries such as banking, real estate, and energy are subject to macroeconomic factors including interest rates, inflation, and fiscal policy.

The Indian market, and the BSE by extension, is commonly understood in terms of broad market indices like the Sensex. But a look at sectors in isolation enables a more nuanced understanding of market behaviour. Sectors can outperform or underperform at various stages of the economic cycle, and their share performance can differ depending on how sensitive they are to economic and policy shifts. Through these differences, investors, analysts, as well as policymakers can better understand how particular sectors are driving the growth of the stock market as well as the overall economy.

Sectoral Contributions to India’s Economic Growth

The interaction between growth in the stock market and economic contributions of different sectors is complex and multi-dimensional. The economy of India depends on a mix of conventional industries like manufacturing and agriculture along with new service industries like telecommunications and information technology. The stock market gives a reflection of these contributions in which the performance of particular sectors in the BSE can reflect trends in productivity, jobs, foreign exchange earnings, and economic resilience overall.

For example, India's banking sector is instrumental in economic growth as it allows businesses to channel in capital, facilitates consumer consumption spending, and supplies credit for infrastructural development. The behaviour of banking stocks listed on the BSE indicates financial system health, interest rates, credit expansion, and confidence by investors in the banking system. Likewise, the IT industry, being a vital contributor to India's GDP, foreign exchange revenues, and employment, has experienced exponential growth in the recent decades. It is among the important industries that propel India's status as a world leader in technology and services.

In addition, industries such as energy and utilities help drive infrastructure development and are closely associated with India's sustainable development aspirations. Some of these industries are very sensitive to policy changes, including those that favour the use of renewable energies or help fund major infrastructure projects. The stock performance of these industries can be significant in terms of providing investors and policymakers with important information regarding the success of these policies and the growth that is possible.

1.2 Need for study:

Intuitive gaps in available research highlight the necessity of sector-wise performance examination on the Bombay Stock Exchange (BSE). Available literature tends to concentrate on specific indices, excluding upcoming sectors and inter-sectoral dynamics that may offer more insight into market trends. Comparative reviews between disparate economic eras, e.g., pre-and post-reforms, are often absent, restricting comprehension of how various sectors respond to macroeconomic shocks. In addition, the majority of studies disregard the impact of global economic conditions and increasing prominence of ESG (Environmental, Social, and Governance) factors in the current marketplace. Behavioural finance factors, for example, how investors react to sector-specific risks, are also not given proper consideration. Finally, there is no adoption of sophisticated modelling methods and application of technological variables that may advance knowledge of sectoral volatility and performance.

1.3 Scope of the study

The scope of the present research study is an all-encompassing analysis of sectoral performance indicators for diverse sectors listed on the BSE. This shall comprise incorporating macroeconomic factors like GDP, Inflation to examine their effect on sector performance in the long term. The study seeks to identify inter-sectoral relations and global economic factors' effects while accounting for ESG parameters in making investment decisions. Using sophisticated analytical techniques, such as longitudinal studies, the study will examine long-term trends and inter-linkages between sectors. Investor behaviour insights will also be a priority, seeking to know how various sectors respond to macroeconomic changes and market sentiments. This multidimensional approach will fill current gaps and offer useful insights for investors and policymakers to effectively navigate the intricacies of the Indian stock market.

1.4 Limitations of the study:

1. Data Availability and Accuracy – The research is based on historical and financial information from BSE-listed companies, which can be revised or inconsistent. There can be a lack of adequate publicly available data for some industries.
2. Macroeconomic and Policy Factors – External macroeconomic factors like government policies, international market trends, geopolitical events, and fiscal interventions also influence GDP and sectoral performance and making it hard to discern the effect of inflation and the pandemic.
3. Variability Across Sectors – Varying sectors make different recovery paces because of changing factors such as fluctuations in demand, regulatory issues, and global dependencies, which complicates making comparisons directly.
4. Indirect Effects of Inflation – Inflation impacts companies differently depending on their pricing ability, supply chain strength, and cost profile. Generalizing its impact across industries might not give a correct impression.
5. Volatility in the Stock Market – Share prices move on the basis of investor sentiment, speculation, and international events, which might not always be an indication of the actual economic performance or recovery of an industry.
6. Time Frame Choice Bias – The findings of the study can change based on the time frame to be analysed. A short time frame might miss longer-term patterns, whereas a long-time frame could have extraneous factors.
7. Omission of Unlisted Sectors – The study is conducted on BSE-listed firms alone, excluding unlisted or informal sector firms that collectively contribute to GDP.
8. Causal Relationship Challenges – Correlation between stock performance, inflation, and GDP contribution does not necessarily imply causation, making it challenging to define direct relationships.

2. REVIEW OF LITERATURE

​​1. (Prasanth, n.d.)​ The research study examines the impact of selected sectoral indices on the Bombay Stock Exchange (BSE) with a special focus on the S&P BSE Sensex. It analyzes the relationship between various sectoral indices and Sensex using risk-return analysis, correlation, and volatility models like ARCH and GARCH. The study highlights how different sectors contribute to market movements and evaluates their influence on overall market performance. It also discusses the volatility patterns of sectoral indices and their implications for investors. The findings suggest a significant connection between sectoral indices and Sensex, with recommendations for better investment strategies. Overall, the research provides insights into market behavior, aiding investors in decision-making.

​​2. (Dr et al., 2019)​ The research examines the financial performance of selected cement companies listed on BSE and NSE in India through annual growth analysis. It highlights the industry's energy-intensive nature and key cost factors, such as power and fuel efficiency, that influence profitability. The study employs statistical tools like ANOVA to compare actual and trend values of net sales, identifying significant differences in financial growth among companies. The research also projects future sales trends and explores factors affecting the sector, including government infrastructure projects and regulatory challenges. Findings suggest that Ultra Tech Cement and ACC exhibit steady growth, while others show varying financial performances. The study concludes that technological advancements, policy changes, and infrastructure investments will shape the industry's future.

​​3. (A. K. Khan & Faisal, 2022)​ The research examines the impact of crude oil price fluctuations on the Indian economy, focusing on trends since 1991. Using the ARIMA model based on the Box-Jenkins approach, the study forecasts future crude oil price movements and their economic implications. Findings suggest that rising crude oil prices significantly influence India's GDP, current account deficit (CAD), fiscal deficit, and inflation rates. The study highlights how high oil prices negatively affect key industries such as airlines, plastics, and manufacturing while benefiting oil exploration firms. Results indicate a long-term upward trend in crude oil prices, further stressing India's economic vulnerabilities. The research suggests policy measures such as tax reforms and alternative energy adoption to mitigate these risks.

​​4. (Polisetty et al., 2016)​ The research explores the influence of exchange rate fluctuations on India's stock market, specifically the BSE Sensex and NSE Nifty, from 2005 to 2014. It examines the correlation between the INR/USD exchange rate and stock indices to determine if a significant relationship exists. Findings reveal a weak correlation, indicating that stock prices and exchange rates are influenced by multiple macroeconomic factors, including interest rates, inflation, and global market trends. The study suggests that stock market movements are often driven by investor sentiment rather than direct currency fluctuations. It concludes that financial integration has increased but does not necessarily create a strong linkage between exchange rates and stock performance. The research highlights the need for further studies incorporating more variables to better understand market dynamics.

​​5. (Rowe & Morrow, n.d.)​ The research examines the dimensionality of firm financial performance using accounting, market, and subjective measures. It argues that while these three metrics are distinct, they share an underlying financial performance construct. Using second-order confirmatory factor analysis, the study finds significant correlations among the three dimensions, though market-based measures show weaker associations. The findings suggest that while accounting and subjective measures align closely, market-based metrics provide a future-oriented perspective. The study emphasizes the need for a comprehensive approach when evaluating financial performance. Overall, it concludes that financial performance is multidimensional and requires further research for deeper understanding.

​​6. (A. A. Khan & Javed, 2017)​ The research analyzes the volatility behavior of S&P BSE BANKEX returns in India using the GARCH (1,1) model. It examines how domestic (SENSEX) and international indices (NASDAQ, SSE, and FTSE) influence BANKEX volatility. Findings indicate that SENSEX, NASDAQ, and SSE returns significantly impact BANKEX volatility, while FTSE has no significant effect. The study confirms the presence of volatility clustering, meaning periods of high volatility are followed by high volatility and vice versa. Statistical tests validate the model, showing no serial correlation, no remaining ARCH effect, and normally distributed residuals. Overall, the study highlights the importance of external market shocks in shaping BANKEX return volatility.

7.(Satyendra, Sarad, Baburam, n.d.) This study explores the association between the key macroeconomic variables-GDP, inflation-and the Indian stock market performance, especially focusing on the Bombay Stock Exchange (BSE). The study reveals a positive association between Gross Domestic Product (GDP) and the BSE index, meaning that the Indian stock market performs well with the growth of the Indian economy. Conversely, it finds a moderate negative correlation between inflation and the BSE index, suggesting that rising inflation may dampen market performance. Using a multiple regression model, the research reveals that 88.5% of the variation in the BSE index can be explained by GDP and inflation. The findings further show that a 1% increase in GDP leads to a significant 17.08% rise in the BSE index, while a 1% increase in inflation results in a 2.17% decrease in the index. These results underscore the importance of GDP and inflation as key factors influencing stock market performance in India.

8. (AN EMPIRICAL STUDY ON THE PERFORMANCE OF TOP 100 BSE LISTED COMPANIES OF INDIA FOR THE FINANCIAL YEAR 2022-23, 2023) The financial performance of top 100 listed companies on Bombay Stock Exchange during the financial year 2022-23 will be analysed from BSE data and Prowess IQ database. The primary focus was on assessing key financial indicators such as profitability, liquidity, and operating ratios. To analyse the data, various statistical tools were employed, including mean, median, and correlation analysis, along with graphical representations to provide clear insights into the trends. The outcome of the analysis is that the implicated companies were posting good profitability and liquidity ratios, which indicates strong financial stability of the firms. The operating ratios also reflected equally good average performances, a sure sign that there was efficacy in their running operations. Finally, the study confirmed a high positive correlation of the profitability, liquidity, and operating ratios to mean that they co-exist positively.

9.(Deep Sharma & Mahendru, n.d.) The study explores the long-term relationship between stock prices on the Bombay Stock Exchange (BSE) and key macroeconomic variables, shedding light on market dynamics during a significant period. Using the multiple regression model proposed by Galton in 1877, the researchers examined data from January 2008 to January 2009. The researchers examined the interaction between stock prices and four key variables: exchange rates, foreign exchange reserves, inflation rates, and gold prices. The results show a significant relationship between exchange rates and gold prices with the fluctuations in stock markets, which implies that these two variables have a crucial influence on stock prices. Foreign exchange reserves and inflation rates, on the other hand, showed very little effect on stock price movement, which reflects a weaker connection with market performance over this period.

10.(Subburayan, 2018) The document "Influence of Macroeconomic Variables on Bombay Stock Exchange (BSE) Sensex" explores how various macroeconomic factors impact the performance of the BSE Sensex. It emphasizes the relationship between economic indicators like inflation, interest rates, exchange rates, and GDP growth with stock market movements. The study highlights how fluctuations in these variables can influence investor sentiment and market trends. It also discusses the importance of stable economic policies and their impact on financial markets. The authors use statistical methods to analyse historical data, drawing correlations between economic conditions and stock performance.

The findings suggest that macroeconomic stability plays a crucial role in market efficiency.

The study concludes with recommendations for policymakers to maintain economic balance to support market growth.

11.(Reddy, 2012) This paper explores the subtle dynamics between macroeconomic determinants-inflation, GDP growth, and interest rates-and Indian equity market returns over 1997-2009. It reveals spectacular insights about how these indicators of economic efficiency define stock prices' attitudes, thus doing a great bit for authorities and investors. As the analysis will indicate, the stock market returns are a product of macro and micro forces. Using a powerful regression model, the paper is able to explain an astonishing 95.6% of the variation in stock prices with three key predictors: GDP growth, interest rates, and inflation. The findings underscore that lower interest and inflation rates tend to have a positive influence on stock prices, providing a conducive environment for market growth. In contrast, GDP growth emerges as a significant driver, exerting a consistently strong positive impact on stock returns.

12.(R. RAJESH RAMKUMAR, 2013) The Indian financial market plays a vital role in the economy, facilitating transparent trading of financial assets under regulatory oversight. It encompasses the money market for short-term credit and the capital market for medium- and long-term credit, with the securities market divided into primary and secondary markets. Major stock exchanges, like the BSE and NSE, track market performance through indices such as the BSE SENSEX. A study from 2006-2011 assessed the efficiency of BSE sectoral indices and 30 top companies using ADF Test, Runs Test, and GARCH models. Six indices—Automobile, Bank, Health Care, IT, Metal, and Power—were analysed for risks, returns, and volatility. Descriptive statistics indicated varied sectoral performance, with high standard deviation reflecting increased risks. Stationarity was confirmed, but market efficiency results were mixed, with some indices showing weak-form efficiency. The study, however, faced limitations, including reliance on secondary data and a restricted sample size.

13. According to (Tarczynska-Luniewska et al., 2022) the energy sector plays a pivotal role in supporting industries and driving economies forward. Their research examines the performance and risk exposure of the S&P BSE Energy Index and its key constituent companies during two significant crises: the COVID-19 pandemic and the Russia–Ukraine conflict. The study offers valuable insights for energy investors, companies, and policymakers by presenting strategies to mitigate investment risks, diversify operations, and manage price fluctuations effectively. It highlights how the psychological impact of COVID-19 initially influenced the market, while the Russia–Ukraine conflict created varied effects on stock performance. By developing a risk exposure matrix, the research ranks ten representative companies, showcasing their resilience and potential for growth and returns in a volatile environment.

14. According to (Poddar et al., 2019) the study investigates the relationship between Corporate Social Responsibility (CSR) activities undertaken by Indian companies and the Sustainable Development Goals (SDGs) during the period from 2014 to 2016, after the introduction of mandatory CSR provisions under the Companies Act. The research highlights critical gaps in CSR investments, particularly in areas such as climate change, biodiversity, sustainable consumption, marine life, and the conservation of flora and fauna, which require more attention. Companies with greater environmental impacts were found to be more actively engaged in CSR initiatives. However, the geographic analysis revealed disparities, with inadequate CSR expenditure directed toward the North Eastern states, Jammu and Kashmir, and union territories. The paper concludes by recommending a thorough review of the CSR framework to address these gaps and enhance its alignment with the SDGs.

15.(Kumar et al., 2021) explored the impact of the COVID-19 outbreak on Indian firms listed on the NSE, with a focus on how various sectors and market capitalization sizes were affected. The research analysed a sample of 1,335 firms using an event study methodology, which allowed for a detailed examination of stock price fluctuations during the pandemic. The findings revealed that the pandemic led to a negative impact on stock prices, although the effects varied across different sectors. Interestingly, the study found that firms with above-median market capitalization were more significantly impacted by the outbreak, which contradicted the commonly observed size effect phenomenon, where smaller firms tend to experience greater volatility during crises. This study provides valuable insights for shareholders, helping them manage their portfolios and mitigate risks during extreme events like pandemics or wars. Furthermore, it stands out as the first comprehensive analysis of the pandemic's impact on Indian sectors and addresses the size effect anomalies observed in such situations.

16.According to (Carter & Simkins, 2004) conducted a detailed analysis of how airline stock prices reacted to the September 11, 2001, terrorist attacks. Using a multivariate regression model, they examined the market's response on September 17, the first trading day after the attack, and the subsequent period from September 18 to 24, coinciding with the enactment of the Air Transportation Safety and System Stabilization Act. Their findings suggest that the market responded with rational pricing, distinguishing between airlines based on their financial stability, particularly the level of cash reserves, as it reflected concerns about the increased likelihood of financial distress. The study also found that major airlines benefited from the stabilization act, whereas smaller airlines did not. These results underscore the market’s ability to differentiate among firms during catastrophic events and highlight the impact of policy measures on industry dynamics.

17. According to ​(Kassimatis, n.d.2000)​ In the early 1980s, several developing countries introduced liberalization policies with a focus on stock market development to drive economic growth. Kassimatis (2000) explores this shift in a thesis that investigates three primary research questions. First, it examines the direct impact of stock market development on economic growth in these countries. Second, it explores the indirect impact via stock price volatility, questioning whether stock market volatility increased following liberalization policies. The third question centres on whether emerging stock markets became more integrated with one another and with developed markets post-liberalization. Noting the scarcity of empirical research in this field, the thesis points out that the findings from previous studies are mixed. Kassimatis aims to contribute new evidence by addressing methodological issues faced by earlier research, while also considering the unique circumstances of each country in the analysis.

18.According to (Santhi, 2016) discusses the evolution of the Indian stock market, highlighting that India has 22 stock exchanges, with the Bombay Stock Exchange (BSE) being the oldest, established in 1875. Over the years, the Indian securities market has experienced rapid modernization, particularly in the secondary market, driven by advancements in technology and the rise of online transactions. The Indian equity market has grown significantly, now considered large in comparison to the country’s stage of economic development, with a notable increase in the number of listed companies and market capitalization expanding nearly 11 times. The paper delves into the different stages of the Indian capital market, examining its early challenges, notable scams, growth, current status, and the various factors influencing the upward and downward trends in the market.

19.(Ramnarayanan & Katoch, 2021) This study investigates the impact of momentum and contrarian investment strategies on the Bombay Stock Exchange (BSE). The authors analyse data from the past eight years to determine sectoral trends and identify winners and losers over long- and short-term periods. Using annual returns, beta values, and t-tests, they assess how different sectors behave under each strategy. The research finds that some sectors consistently exhibit momentum trends, while others follow contrarian patterns. Short-term investments tend to favour contrarian strategies due to market volatility, whereas long-term investments show stronger momentum effects. The study highlights that investors should carefully choose strategies based on sectoral trends and investment horizons. Additionally, it underscores the influence of global financial integration on Indian market behaviour. The findings are relevant for investors seeking optimal portfolio diversification strategies. The study suggests that regulatory improvements and technological advancements in stock trading influence market efficiency. Ultimately, the research contributes to a deeper understanding of investment decision-making in emerging markets like India.

20. (Parmar & Parmar, n.d.) This study by Parmar and Parmar (2012) evaluates the financial performance of the BSE 30 index amid the global economic meltdown. The research highlights how the economic crisis affected various Indian stock market sectors, particularly the BSE SENSEX, which showed a sharp decline before stabilizing in 2011-12. Investors faced uncertainty regarding their investments due to fluctuating market trends. The study assesses financial performance using operating and financial leverage as key indicators. A comparison of financial analysis and variance valuation techniques is conducted over a four-year period. The findings indicate that stock market indices, including sectoral indices, provide crucial insights for investors' decision-making. The study underscores the role of financial regulation and innovation in shaping India’s financial markets. Additionally, it emphasizes the impact of free float market capitalization, financial risk factors, and leverage on stock performance. The research suggests that despite the economic downturn, regulatory developments and evolving financial instruments continue to provide stability. Overall, the paper contributes to understanding stock market performance trends and investor confidence in financial markets.

21. (Manimaran & Anand, 2017) The study "Analysis on Return, Risk and Volatility of Sectoral Indices Against BSE" by Manimaran and Anand (2017) examines the performance of various sectoral indices in comparison to the BSE SENSEX over the period from January 2007 to December 2016. The research classifies sectors based on return, risk, sensitivity, and volatility using statistical tools such as Pearson correlation, standard deviation, beta, and linear regression. Findings suggest that sectors such as Automobile, Banking, FMCG, and Healthcare yielded high returns, while Telecom had the lowest returns. The study also indicates that Banking and Industrials exhibited high volatility, whereas FMCG and Health sectors had lower risk factors. Moreover, the research highlights the correlation between sectoral indices and the BSE 500 index, identifying sectors that move in sync with market trends. The study provides valuable insights for investors by offering a framework for sector-based investment decisions, emphasizing the role of risk-adjusted returns and predictive models for future market trends.

22. (Dr. Avijit Sikdar, 2021) This study by Sikdar (2021) examines the impact of the COVID-19 pandemic on stock market performance across five major sectors: Pharmaceuticals, Automobiles, Industrial Products, Banking and Finance, and Consumer Goods. The research analyses stock price volatility, the number of transactions, and delivery percentages before and after COVID-19. Using a paired sample t-test, the study compares data from September 2019 to March 2020 (pre-COVID) and April 2020 to August 2020 (post-COVID). The findings indicate significant changes in stock prices, daily returns, and transaction volumes across most sectors, highlighting increased volatility in the post-pandemic period. The pharmaceutical and consumer goods sectors showed resilience, with stock prices rising, while banking and industrial goods faced declines. The automobile sector saw no major impact, except for increased trading activity. The study suggests that heightened market uncertainty led to increased trading volumes across sectors. However, delivery percentages remained largely unchanged, indicating stable investor confidence in the long term. The research concludes that market volatility surged due to the pandemic, requiring investors to adapt their strategies accordingly. These insights offer valuable implications for policymakers and market participants in navigating economic disruptions.

23. (Singh Bhakar et al., 2009) One of the chapters in the book examines the sector-wise analysis of weak form efficiency at the Bombay Stock Exchange (BSE). The study assesses the efficiency of different sectors, including banking, pharmaceuticals, IT, and manufacturing, using statistical methods like autocorrelation tests and run tests. The results indicate that certain sectors, particularly banking and IT, exhibit weak form efficiency, implying that past stock prices do not predict future prices. However, manufacturing and pharmaceutical sectors show some degree of market inefficiency, meaning that stock price trends may provide some forecasting ability. The study highlights the impact of regulatory changes and economic events on sectoral efficiency. Additionally, it suggests that sectoral efficiency influences investor behaviour and portfolio diversification strategies. The findings are crucial for policymakers and investors looking to understand market anomalies. The study also discusses how global financial trends and foreign investment inflows shape the performance of BSE sectors. It emphasizes the role of technology and market structure in driving efficiency. Finally, the research concludes that while BSE sectors are evolving, some inefficiencies persist, offering opportunities for active traders.

24. (Parmeshwar et al., n.d.) This thesis examines the impact of various trade investment strategies on corporate performance of selected BSE-listed companies across multiple sectors. The research evaluates the efficiency of trade investments in sectors such as automobile, FMCG, pharmaceuticals, and IT. Using financial metrics like liquidity ratios, profitability ratios, and solvency measures, the study identifies how different industries respond to investment strategies. The findings indicate that the FMCG and IT sectors demonstrate higher financial stability, whereas automobile and pharmaceutical sectors show moderate volatility. Regression models reveal that investment in subsidiaries, associates, and joint ventures significantly impacts profitability and financial risk management. The thesis suggests that sectoral differences in capital structure and trade policies influence corporate performance. It also highlights the role of macroeconomic factors, such as market trends and regulatory changes, in shaping investment outcomes. The study emphasizes the importance of diversification and efficient working capital management in improving sectoral performance. The conclusions provide policy recommendations for investors and financial strategists to optimize investment returns in different BSE sectors.

2.1 Research gap

There is a general lack in BSE sectoral studies due to constraints on intersectoral dynamics, comparative studies concerning different economic periods, and the effects of various macroeconomic variables, such as inflation, GDP growth, and regulatory changes. Most sectoral studies entirely exclude global economic forces, technological, and environmental, social, and governance factors. Finally, such research does not develop rich metrics for risk-adjusted return performance, longitudinal studies, or insights into the behaviour of investors.

2.2 Objectives of the study

1. To analyse how selected sectors under BSE contributed to India’s GDP
2. To know how inflation affected selected sectors performance
3. To know how share prices of selected sectors under BSE reflected pre and post pandemic

2.3 Hypothesis

1. To analyse how selected sectors under BSE contributed to India’s GDP

(H₀): There is no significant relationship contribution of the selected BSE sectors to India’s GDP.

(H₁): There is a significant contribution of the selected BSE sectors to India’s GDP.

2. To know how inflation affected selected sectors performance

(H₀): Inflation has no significant effect on the performance of selected sectors in the BSE.

(H₁): Inflation has a significant effect on the performance of selected sectors in the BSE.

3.To know how share prices of selected sectors under BSE reflected pre and post pandemic periods.

(H₀): The share prices of selected sectors in the BSE did not change significantly between pre -pandemic and post-pandemic periods

(H₁): The share prices of selected sectors in the BSE changed significantly between pre-pandemic and post-pandemic periods.

3 RESEARCH METHODOLOGY

The methodological approach used for the investigation of the research majorly consists of Quantitative data (process of collecting and analysing numerical data).

The research type is Exploratory, Empirical and Descriptive in nature as it helps in exploring an issue where little prior knowledge exists, is based on facts rather than theories or opinions and also describes characteristics, trends and patterns.

The data collected and used for the study comprises of secondary data.

Secondary Data: This is the data that has been already collected, organized and published by previous researchers and has been used in order to analyse past research papers and to determine the research gap.

The research consists of secondary data obtained from annual financial statements of various companies specifically listed under the Bombay stock Exchange (BSE). It also consists of the data comprised of various economic contributing factors like GDP and Inflation collected from various regulatory bodies like The Reserve Bank of India (RBI), Ministry of Statistics and Programme Implementation (MOSPI). These sources offer comprehensive insights into our research.

The sample size taken for the project is 9- 3 sectors and 3 companies under each sector.

The sampling technique used for the research is stratified random sampling.

The statistical tools used for the study are the following,

Shapiro Wilk test: This is a statistical test used to check whether the data follows a normal distribution. It is commonly used to for hypothesis testing when it is assumed that data is normal distributed for further tests. It was used for one of the objectives. We took the descriptive statistics of each company under the three sectors and used this data to create Normality curves and Q-Q plot curves.

Two factor ANOVA with replication test was conducted after the assumption that our data set has a normal distribution. This was specifically used as our data had single variables which are share prices of three sectors. This was done after the normality test and the values suggested a further post-hoc testing. The results of this test were p- value=0.000527 which is less than 0.05.

The results of the test consisted of “Levene’s test for homogeneity of variance and test between subjects”.

Furtherly we also did a “Volatility Analysis” which helps in understanding the stability and consistency of the sectoral share prices pre and post COVID-19.

Pearson Correlation: This measures the linear relationship between 2 variables. This was used to test the relationship between Expense growth rate (EGR) and Revenue growth rate (RGR).

Pie charts & Bar graphs: These are used to check how GDP of the sectors distributed over the years. They gave a detailed analysis on how each sector contributed to India’s GDP over the years. These charts were further used to represent the correlation or the linear relationship between Expense growth rate (EGR) and Revenue growth rate (RGR) of the companies under each sector.

The Statistical softwares used for the study are the following,

MS EXCEL: MS Excel was used to calculate descriptive statistics of the companies under each sector. It was used to construct pie charts, bar graphs and column charts. We also calculated GDP contribution of the companies and Expense growth rate (EGR) and Revenue growth rate (RGR) using MS Excel. Furtherly this software was used to calculate “Pearson correlation and Standard deviation” of the inflation data.

SPSS: SPSS was used to conduct “Shapiro Wilk test” to test normality of our data set. It was used to construct normality curves and Q-Q Plot curves. Furtherly we also conducted “Two factor ANOVA with replication” to assess the significant differences between two independent variables. This was also used to construct correlation charts for a visual representation of the linear relationship between Expense growth rate (EGR) and Revenue growth rate (RGR) of the companies under each sector.

Mendeley reference manager: It was used to cite articles for review of literature and for citing reference links and to insert Bibliography.

4. Company profiles

Sectors chosen:

1. Retail-Adani, Titan, Trent
2. IT-Infosys, TCS, HCL Tech
3. Finance-Axis, HDFC, ICICI

4.1 RETAIL SECTOR

1. Adani Ports and SEZ is India's largest private port operator, part of the Adani Group. Established in 1994, it operates a network of ports and logistics facilities across the country. The company plays a crucial role in enhancing India's trade and logistics infrastructure, handling a diverse range of cargo including containers, bulk cargo, and liquid cargo. Adani Ports aims to leverage technology and sustainability to improve operational efficiency and reduce environmental impact. The company has been expanding its footprint through strategic acquisitions and partnerships, positioning itself as a key player in the logistics sector.
2. Titan Company Limited, established in 1984 and based in Bengaluru, is a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO). Titan is a prominent lifestyle company, offering a diverse portfolio that includes watches, jewellery under the tanishq brand, eyewear, and accessories. Known for its high-quality products and innovative designs, Titan has become a leader in the branded jewellery and watch markets in India. Its emphasis on customer loyalty and product excellence has cemented its position as a key player in the retail and lifestyle sectors.
3. Trent Limited, a part of the Tata Group, is a prominent retail company headquartered in Mumbai, India. Established in 1998, Trent operates multiple retail formats catering to diverse consumer needs. Its flagship brands include Westside, a chain of department stores offering in-house designed apparel, footwear, and home accessories; Zudio a value-fashion brand providing affordable clothing for all age groups; and Star Bazaar, a hypermarket chain offering groceries and household essentials. Additionally, Utsa presents contemporary designs inspired by traditional craftsmanship. Under the leadership of Chairman Noel Naval Tata and CEO Palani Swamy Venkatesalu, Trent has steadily expanded its presence across India. With a focus on quality and innovation, the company continues to strengthen its position in the retail sector, reporting robust financial performance and significant market capitalization.

4.2 IT SECTOR

1. Infosys is a global leader in technology services and consulting, founded in 1981. The company offers a wide range of services including software development, maintenance, and independent validation services to companies in various industries. Infosys is renowned for its innovation in IT solutions and has been at the forefront of digital transformation initiatives. With a strong emphasis on sustainability and corporate social responsibility, Infosys invests heavily in research and development to drive technological advancements. The company's global presence spans multiple countries, making it a significant contributor to the Indian IT sector.
2. TCS (Tata Consultancy Services), founded in 1968 and headquartered in Mumbai, is a global leader in IT services, consulting, and business solutions. A subsidiary of the Tata Group, TCS provides cutting-edge technology solutions to industries such as banking, retail, healthcare, and manufacturing. Its expertise lies in digital transformation, cloud computing, artificial intelligence, and business process outsourcing. TCS has a strong presence in over 40 countries and is celebrated for its innovation, research-driven approach, and commitment to helping businesses achieve digital growth.
3. HCL Technologies, a leading global IT services and consulting company, was founded in 1976 and is headquartered in Noida, India. As a part of the HCL Enterprise, the company has established itself as a key player in the IT industry, offering a wide range of services, including software development, IT infrastructure management, digital transformation, and engineering solutions. HCL serves clients across various industries, such as healthcare, banking, manufacturing, and telecommunications, with a strong focus on innovation and customer-centric solutions. It is known for leveraging next-generation technologies like cloud computing, artificial intelligence, and cybersecurity to drive business growth for its clients. With a presence in over 50 countries, HCL Technologies is recognized for its commitment to sustainability, employee well-being, and delivering value-driven services, making it one of the top IT companies globally.

4.3 FINANCE SECTOR

1. HDFC (Housing Development Finance Corporation Limited) is one of India's leading financial institutions, established in 1977 and headquartered in Mumbai. It has played a pivotal role in the growth of the housing finance sector in India by providing a wide array of financial products such as home loans, property loans, and deposit products. Through its subsidiaries, HDFC also offers life insurance, asset management, and real estate funding services. Known for its strong financial stability and customer-centric approach, HDFC is a trusted name in the Indian financial landscape.
2. Axis Bank, founded in 1993 and headquartered in Mumbai, is one of India’s largest private sector banks. It provides an extensive range of financial services, including retail banking, corporate banking, investment banking, and wealth management. With a strong digital infrastructure and a global presence, Axis Bank serves individuals, SMEs, and corporate clients. It is recognized for its robust financial solutions and innovative banking services, making it a major player in India's banking industry.
3. ICICI Bank Limited is an Indian multinational banking and financial services company headquartered in Mumbai, with a registered office in Vadodara. Established on January 5, 1955, it offers a wide range of banking products and financial services to corporate and retail customers. As of September 2024, the bank operates a network of 6,613 branches and 16,120 ATMs across India, and has a presence in 11 countries. ICICI Bank's subsidiaries include ICICI Prudential Life Insurance, ICICI Lombard General Insurance, and ICICI Securities.

5. DATA ANALYSIS & INTERPRETATION

5.1 TO KNOW HOW SECTORS CONTRIBUTED TO INDIA’S GDP

Fig. 5.11

Illustrations are not included in the reading sample

Source: MoSPI, India (Press Note on First Advance Estimates of GDP for 2024-25)

India’s GDP (at current prices) over the years:

Table 5.11

Illustrations are not included in the reading sample

Source : https://www.indiabudget.gov.in/economicsurvey/doc/Statistical-Appendix-in-English.pdf

GDP CONTRIBUTION OF EACH SECTOR:

1. RETAIL:

Table 5.12

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.12 GDP CONTRIBUTION

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

The pie chart represents the GDP contribution of the retail sector over different years.

The breakdown is as follows

2018-2019 (Blue): 11%

2019-2020 (Red): 12%

2020-2021 (Green): 12%

2021-2022 (Purple): 15%

2022-2023 (Light Blue): 22%

2023-2024 (Orange): 28%

Interpretation

The GDP contribution of the retail sector has generally increased over the years.

The contribution was relatively low in the years 2018-2019 and 2019-2020, staying around 11-12%. There was a slight increase in 2020-2021 (12%) and a more significant rise in 2021-2022 (15%). A sharp increase can be seen in 2022-2023 (22%) and 2023-2024 (28%), suggesting strong growth in the retail sector. This significant growth in recent years suggests a booming retail industry, likely driven by increased consumer spending, expansion of e-commerce, and favourable economic policies. The data indicates that the retail sector has become an increasingly vital component of GDP, reflecting its strong and consistent growth trajectory. The trend indicates that the retail sector has played an increasingly vital role in GDP contribution, possibly due to factors such as market expansion, technological advancements, increased consumer spending, or policy changes.

Fig.5.13 GDP CONTRIBUTION

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

The bar and line chart represent the GDP contribution of the retail sector over multiple years. It includes key metrics such as Retail Total Revenue, Retail GDP Contribution, Retail GDP Contribution (percentage), and Retail National GDP over the years 2018-2019 to 2023-2024.

Some of the Key Observations made are:

Steady Growth in Total Retail Revenue: The blue bars indicate that retail revenue remained relatively stable from 2018-2021 but started to rise significantly from 2021-2022 onwards. The highest revenue is recorded in 2023-2024.

Marginal Retail GDP Contribution: The red bars, representing the direct GDP contribution from retail, appear relatively small compared to the total revenue, suggesting that while the sector generates significant revenue, its direct contribution to GDP is proportionally lower.

Growth in Retail GDP Contribution (%): The green line suggests an increasing percentage of GDP being contributed by retail, aligning with the overall growth of the sector.

National GDP Growth: The purple line indicates a steady increase in national GDP, with a more pronounced rise from 2021-2024, likely influenced by the expansion of the retail sector.

Interpretation

The retail sector is growing steadily, with an increase in total revenue and a rising share in national GDP. The sector experienced a notable boost post-2020-2021, possibly due to economic recovery, digital transformation, or increased consumer spending. While revenue is increasing sharply, the direct GDP contribution remains relatively small, suggesting that other sectors might still dominate overall economic output

B. IT SECTOR:

Table 5.13

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.14 GDP CONTRIBUTION

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

The pie chart illustrates the GDP contribution of the IT sector over different years from 2018-2019 to 2023-2024.

The breakdown is as follows:

2018-2019 (Blue): 13%

2019-2020 (Red): 14%

2020-2021 (Green): 15%

2021-2022 (Purple): 17%

2022-2023 (Light Blue): 20%

2023-2024 (Orange): 21%

The contribution of the IT sector to GDP has risen year after year, from 13% during 2018-2019 to 21% during 2023-2024. The increase is gradual between 2018-2021 (13% to 15%).

There is a quicker rise between 2021-2024, from 17% to 21%, indicating strong growth.

Interpretation

The contribution of the IT sector towards GDP has steadily risen year after year. The maximum growth was seen post-2020-2021, perhaps because of enhanced digitalization, remote work culture, and technological improvements. The strong rise in 2022-2023 and 2023-2024 suggests the IT sector is playing an increasingly vital role in the economy. Future Implications: If this trend continues, the IT sector may become one of the dominant contributors to the GDP.

Fig.5.15 GDP CONTRIBUTION

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

The bar and line chart represent the GDP contribution of the IT sector over multiple years from 2018-2019 to 2023-2024.

Some of the Key Observations made are:

Steady Increase in Total Revenue: The blue bars indicate that total revenue has gradually increased over the years, with a significant rise from 2021-2024.The largest revenue is observed in 2023-2024, showing strong sectoral growth.

Marginal GDP Contribution: The red bars, representing the sector’s GDP contribution, appear small compared to total revenue. This suggests that while the sector generates substantial revenue, its direct share in GDP remains relatively lower.

National GDP Growth Trend: The purple line represents national GDP, which shows a consistent upward trend. A noticeable acceleration in GDP growth is seen post-2021, indicating a stronger economic expansion.

Significant Revenue Growth in Recent Years: Revenue remained relatively stable from 2018-2021.However, from 2021-2024, there is a sharp increase, likely due to industry expansion, rising demand, or economic recovery efforts.

Interpretation:

The IT industry is growing immensely, particularly in the recent years. The increase in total revenue is high, showing a thriving technology sector. GDP contribution is increasing, though at a lesser rate than revenue, indicating: High reinvestment rates, R&D expenditure, International expansion having an effect on domestic GDP share. The national GDP is on a steady rise, with the IT sector playing an increasing role in economic growth. If this trend continues, the sector could become a more dominant contributor to national GDP in the coming years

C. FINANCE SECTOR:

Table 5.14

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.16 GDP CONTRIBUTION

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

The pie chart illustrates the GDP contribution of the finance sector over the years from 2018-2019 to 2023-2024.

The breakdown is as follows

2018-2019 (Blue): 12%

2019-2020 (Red): 13%

2020-2021 (Green) :14%

2021-2022 (Purple): 15%

2022-2023 (Light Blue): 19%

2023-2024 (Orange): 27%

Interpretation

The contribution has risen comparatively steadily over time. The share of the sector was 12% during 2018-2019 and has reached 27% during 2023-2024. The increases are comparatively slow, demonstrating the steady increase in the finance sector's contribution to GDP. The finance sector's highest contribution is made to GDP during 2023-2024 at 27%, reflecting robust financial growth. The industry contributed the least between 2018-2019 at 12%, implying a smaller contribution in the economy then. The sharpest increase was recorded between 2021-2022 (15%) and 2022-2023 (19%), followed by another sharp increase in 2023-2024 (27%). The finance sector has shown steady growth in the contribution to GDP, with very fast growth over recent years (2021-2024). The dramatic increase from 15% to 27% in a mere three years indicates a thriving financial sector, digital revolution, and higher investment activities. If the trend does not break, the financial sector may emerge as one of the highest contributing sectors in the national economy. Increase in digital banking and fintech innovations, resulting in greater financial transactions. Growth of stock markets and investment sectors, with higher participation. Government initiatives favouring financial inclusion, credit growth, and banking infrastructure investment. Foreign investments and international financial integration are augmenting the sector's contribution

Fig.5.17 GDP CONTRIBUTION

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

The above bar and line chart present the contribution of the finance sector to GDP over the years in terms of Total Revenue, GDP Contribution, and National GDP from 2018-2019 to 2023-2024.

Some of the Key Observations made are:

Growth in Total Revenue: The blue bars indicate that total revenue has been increasing over the years, with a significant rise from 2021-2024.The highest revenue is recorded in 2023-2024, showing a major expansion in the sector's financial performance.

National GDP Expansion: The purple line representing national GDP shows consistent growth throughout the years. There was a slight stabilization between 2019-2021, followed by strong upward movement Post-2021. This trend suggests economic recovery, growth in key industries, and increasing market activity.

Marginal GDP Contribution: The red bars, representing the direct GDP contribution, appear relatively small compared to the total revenue. This suggests that while the sector generates substantial revenue, its direct contribution to GDP is proportionally lower.

Significant Revenue Growth Post-2021: 2018-2021: Revenue shows a steady but slow increase.

2021-2024: Revenue jumps significantly, indicating economic recovery, expansion of industry operations, and increased demand.

Interpretation

The chart illustrates a strong upward trend in total revenue and national GDP, especially post-2021, which aligns with economic growth and financial sector expansion. However, the sector’s GDP contribution remains proportionally lower compared to revenue, suggesting that while earnings are growing, their direct impact on GDP is constrained. The financial sector's contribution to GDP has been increasing, particularly in the last two years.

Total revenue and GDP contribution show a positive correlation, meaning a growing finance sector is directly benefiting the national economy.

The national GDP remains on an upward trajectory, but its growth is slower compared to the finance sector's revenue rise.

5.2 TO KNOW HOW AVERAGE INFLATION AFFECTED VARIOUS SECTORS PERFORMANCE

Fig. 5.21

Illustrations are not included in the reading sample

Source:

https://www.macrotrends.net/global-metrics/countries/IND/india/inflation-rate-cpi

Fig. 5.22

Illustrations are not included in the reading sample

Source:

https://www.macrotrends.net/global-metrics/countries/IND/india/inflation-rate-cpi

- KEY ASSUMPTIONS TAKEN: 2018-19 taken as base year

A. RETAIL SECTOR

Table 5.21

Adani

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation varied from 3.73% to 6.70%.

Expenses & Revenue: Expenses increased sharply and peaked in 2022-23. Revenue grew steadily, except for a dip in 2020-21.

EGR, is very unstable. In the year 2021-22, it reached a high of 76.63%, and it dropped to -37.22% during the pandemic year i.e., 2020-21.

RGR is mainly positive except for decline in 2021-2022, 2020-2021, and 2019-2020.

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: -35.31%. Inflation: 5.22%.

Expenses are decreasing significantly, showing that company controls costs.

2022-23: EGR: 57.26%. Inflation: 5.65%.

When the EGR increases more than the inflation, expenses will start rising much quicker than inflation which will indicate a cost pressure.

2021-22: EGR: 76.63%. Inflation: 6.70%.

Expenses are increasing at a much greater rate than inflation.

2020-21: EGR: 37.22%. Inflation: 5.13%.

Costs are growing much faster than inflation (EGR>Inflation).

2019-20: EGR: 40.09%. Inflation: 6.62%.

Expenses are increasing faster than inflation.

Interpretation

The EGR (-35.31%) is lower when compared to the inflation (5.22%) in the year 2023-24 which means the expenses have decreased significantly. It shows effective cost-cutting or operational efficiencies. In the year 2023-24, the company, controlled expenses efficiently as expenses dropped simultaneously. In 2022-23, the effective government revenue rate (EGR) at 57.26% was much higher than inflation at 5.65% – that is, costs increased a lot faster than the rise in prices across the board. This may point to operational costs, pay hikes, or wasteful expenditure. EGR (76.63%) versus Inflation (6.70%) in 2021-22 shows a lot of excess in expenses. The problem is probably due to the increasing raw material costs or supply chain problems. In 2020-21, costs rose faster than overall prices at 37.22% vs 5.13% EGR vs inflation. This means that there were inflationary pressures or increase in operational expenses but lesser than 2021-22. The firm could have been ramping up activities or experiencing pandemic-driven cost hikes. In 2019-20, EGR is 40.09% which is higher than inflation of 6.62%. This indicates the expenses have increased at a substantial rate. Even though there were cost pressures, inflation is also relatively on the higher side possibly due to external factors. During 2019-20 to 2022-23, expenses grew faster than inflation, suggesting cost pressures. The biggest problem was in 2021-22 as expenses grew excessively (76.63%) against inflation of 6.7%.

PERFORMANCE:

Comparing the growth in revenue versus the growth in expenses:

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1. In the 2023-24 period, revenue grew but expenses dropped significantly indicating good cost control and improved profitability.
2. In 2022-23, expenses increased at a faster rate than revenues thus it can be inferred that the profit margins also decreased.
3. In 2021-22 revenue dropped but expenses rose sharply, resulting in severe profitability distress in companies profit margins shrank due to high expenses and less revenue.
4. In 2019-20, expenses grew while revenue declined which is serious financial inefficiencies.

Interpretation

In 2023-24, an increase in sales is currently about 29.97 percent while expenses have reduced by 35.31 percent showing very strict internal cost controls and outstanding profitability given that company revenue is earned while cutting costs at the same time. Revenues shot upwards by 24.51% in 2022-23, but the expenses jumped up by as high as 57.26%. The expenses overgrew the revenues, leading to thinner profit margins, which now come at a hefty cost to finance. Revenue went down in 2021-22 by 3.91%, and expenses rose tremendously at 76.63%. It makes a very serious context, whereby revenues are going down and costs continue going up, creating a basis for problems of profitability and possible inefficiency. Instead, in 2020-21, revenues increased only marginally by 5.73% but costs went up at a rate of 37.22% that did not contribute positively to the profit margin resulting into lower profit margins. In 2019-20, revenues dropped to 12.99 percent, while expenses hiked up to 40.09. That means it demonstrates significant economic inefficiency in the sense that costs still increased even while revenues were dropped, placing profitability and projections under duress.

Table 5.22

Trent

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation varied from 3.73% to 6.70%.

Expenses and Revenue: High compared to Table 1. Highest expenses were registered in 2023-24 and revenue also showed significant growth.

EGR and RGR: Highly variable. Revenue growth rate was maximum in 2022-23 (98.81%) and minimum in 2020-21 (-35.57%).

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 40.45% Inflation: 5.22%

Costs are rising much higher than the rate of inflation, thus leading to cost pressures on the company.

2022-23: EGR: 95.66% Inflation: 5.65%

Expenses surge to huge extents compared to the ever-constant inflation that indicates poor cost control.

2021-22: EGR: 70.19% Inflation: 6.70%

The pressure of cost is spread as the expense increases massively compared to inflation.

2020-21: EGR: 26.81% Inflation: 5.13%

The costs have grown more than inflation; it is prima-facie indicative of growing operational costs.

2019-20: EGR: 22.31% Inflation: 6.62%

Expenses increases faster than inflation, but the pond is smaller.

Interpretation:

Expenses are growing at 40.45% for the year 2023-24, higher than the inflation index even by far at 5.22%. This will cause operation costs to grow unsustainable and make an impact on profitability. The company would have needed to limit expenditures, improve operational efficiency, or negotiate better contracts from suppliers. For the previous year, that is for 2022-23, expenses grow at a stagging 95.66%. Inflation, however, is at mere 5.65%. This essentially means that huge costs were probably caused by deficient budgetary control, wastage, or input price hikes. A totally huge expense increase would render damaging the profits and no revenue increase at all. The expense growth of 70.19% far exceeded the inflation of 6.70% in 2021-22, which clearly points to high-cost increments. This indicates that there are highly inefficient processes involving increased wages and losses in operational budgets. In addition, should this phenomenon continue without control, it might bleed profit margins and render financial viability questionable over time. Though narrower than that of the next years, the gap between expense growth (26.81%) and inflation (5.13%) in the year 2020-21 does exist. This would suggest that costs are growing higher than expected; nevertheless, at a milder rate, it would not matter much, as far as revenue carries similar growth, though cost control remains important. In 2019-20, expense growth (22.31%) surpassed inflation (6.62%), which indicates that costs were rising faster than the general price level. This is an early sign of bad cost control, but not so much worse than a later year.

PERFORMANCE:

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1. The increase in revenues during 2023-22 was more than the rise in expenses, showcasing good expense handling and, therefore, some profit boost.
2. The considerable growth in both revenue and expenses for 2022-23 suggests that the company was scaling up but at the same time incurred high costs, possibly affecting profit margins.
3. In 2021-22, good inflation management resulted in revenues exceeding expenses, and a rise in profits is anticipated.
4. Revenues were actually growing faster than expenses in 2020-21, which evidences hard-won but moderate performance.
5. Revenue growth slightly surpassed the expenses growth in 2019-20; this indicates that profit margins might have stabilized but have not improved significantly.

Interpretation

In 2023-24, revenue grew by 54.59% while expenses increased by 40.45%. Since growth in revenues far exceeds growth in expenses, the company has successfully managed inflation and improved its profits. This suggests better cost control, better pricing policy, or increased sales volume. In terms of revenue growth, 2022-23 witnessed a growth of 98.81%, and in expenses, it was 95.66%. Both of this growth have been enormously high. So much growth took place in the company, and costs rose at an almost commensurate rate, threatening margins. This could say that the company is going very fast in business, the costs are rising with inflation, or there are inefficiencies in operations. Revenue rose by 89.53% while expenses increased by 70.19% in the year 2021-22. Revenue has seen its growth overcoming the expense growth indicating good health in profitability and good cost control. The company was able to grow without much pressure of costs. The company recorded a growth of 35.57% in revenue while expenses increased by 26.81% in 2020-21. The company struck a good balance in costs. This reflected in a balanced financial position for the period. Slightly higher in revenue growth (25.52%) than expense growth (22.31%) in 2019-20. This implies very limited possible profits due to rising almost at the same pace with costs. Moderately pressured on costs limits the profits the company could earn.

Table 5.23

Titan

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation varied from 3.73% to 6.70%.

Expenses & Revenue: Both are maintaining a steady increase with maximum values in 2023-24.

EGR & RGR: Indicates a steady growth path subjected to occasional slowdowns but never a negative growth rate.

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 26.17%. Inflation: 5.22%

Expenses are increasing much faster than inflation, indicating rising costs that may impact profitability .

2022-23: EGR: 39.55%. Inflation: 5.65%

EGR is greater than inflation. Expenses are growing at a significantly higher rate than inflation, suggesting cost pressures.

2021-22: EGR: 25.80%. Inflation: 6.70%

Expenses are rising faster than inflation, leading to increased operational costs.

2020-21: EGR: 8.33%. Inflation: 5.13%

Expenses are increasing at a slightly higher rate than inflation, indicating moderate cost growth.

2019-20: EGR: 3.25%. Inflation: 6.62%

Expenses are growing at a slower rate than inflation, showing strong cost control.

Interpretation

The cost growth for 2023-24 would amount to 26.17%, while inflation was only around 5.22%. This means that costs would invariably increase at a rate much faster than the increase in general price levels unless otherwise accounted for, thus suffering profitability in some cases. Cost grew at a rate of 39.55% for 2022-23. Inflation was just 5.65%. This caused the company to suffer from continuous increases in costs that further resisted the profit margins. Such poor financial implication could come into being as a result of not accompanied revenue growth. For example, expenses rose at a rate of 25.80% for 2021-22 while inflation stood almost four times at a value of 6.70%. The company faces a dramatic increase in costs, which translates to rising operational costs. Probably attributed to growing supply chain problems or escalating raw material prices, it was 2 indicate in all probability, rising operational costs. In 2020-21, the expenses increased by 8.33%, 0.2% having a higher growth than inflation (5.13%). Thus, in most cases, costs grew under control, being more than the inflation spreading but indicating moderate pressure on the costs. In the year 2019-20, there was a growth in expense of only 3.25% as against an inflation of 6.62%, which indicates a very low growth in expenses compared to inflation figures. The company has controlled its costs pretty well and contained operating expenditure during this period. It reflects good financial discipline during this duration.

PERFORMANCE:

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1. In 2023-24 More than income, the expenditure is taking an agile approach. This adjustment will tend to shrink profit margins.
2. Income 2022-23 grows very slightly faster than expenses showing good cost management. Revenue outgrows expenses in the year 2021-22, which means good financial control.
3. In 2020-21 expenses is more than that of income, which may strain profitability of the organization.
4. Revenue grows at a greater rate compared with expenses, reflecting a healthy outcome in finances in the year 2019-20.

Interpretation

Expenses grew faster than revenues in the period under consideration, demonstrating cost pressures. This indicates operational rising costs have perhaps entered a territory where, if nothing changes, the company will not be in a position to generate additional revenue, eventually making for slimmer profit margins. If these patterns persist, profitability may become an issue for the company. The immediate recourse would be to put all emphasis on curbing costs to avoid dragging finances. In 2022-23, revenues grew marginally faster in comparison to expenses, showing the positive effects of financial management. Costs rose sharply, but revenues were generated in keeping with profitability. This shows good pricing strategies, demand, or effective sales. A continued balance like this will be crucial for moving forward.

Note:

Difference 1 = Current year expenses – Previous year expenses

Difference 2 = Current year revenue – Previous year revenue

B. IT SECTOR

Table 5.24

Infosys

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation: It varies from 3.73% in 2018-19 to 6.70% in 2021-22.

Expenses: Increase steadily from ₹54,433 in 2018-19 to ₹97,453 in 2023-24.

Revenue: Increase from ₹73,107 in 2018-19 to ₹1,28,933 in 2023-24.

RGR got the same trend as EGR. It had its highest point in 2021-22 at 20.98%.

EGR: Highest in 2021-22 (23.80%) and lowest in 2023-24 (4.25%).

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 4.25%. Inflation: 5.22%

Expenses thus rise significantly above the inflation threshold at which the cost itself indicates cost pressures faced by the organization. The organization experiences rising operational expenditures, which outstrip general price levels, and affect profit margins potentially.

2022-23: EGR: 22.61%. Inflation: 5.65%

Expenses increased significantly faster than inflation, suggesting cost pressures. The company experienced rising operational costs that outpaced general price levels, potentially affecting profit margins.

2021-22: EGR: 23.80%Inflation: 6.70%

Growth in costs has gone far beyond that of inflation, portraying that expenses are escalating. If well managed, it may, however, reduce profit and financial stability.

2020-21: EGR: 4.15%Inflation: 5.13%

Expense-rise of less than inflation showed cost efficiency. The company was also controlled well by those measures during this time.

2019-20: EGR: 8.62%Inflation: 6.62%

Inflation relates to the increased expense, which is slightly above inflation growth and has minor cost pressure. This necessitates sufficiently monitoring operating expenses for performance.

Interpretation:

Cost management was effective, as costs do not grow faster than inflation in the year 2023-24. The growth of expenses, however, was lesser than the inflation rate, signifying a good control over costs. Such an indication exemplifies an effective management function whereby the rise of expenses would not exceed the rise in price levels. With rising operational costs in 2022—23, expenses have grown significantly faster than inflation. Increased wages, rising raw material costs, or other business expenses are thought to have developed cost pressure, which would influence profitability in case revenue is not growing faster than expenses. In 2021-22, an even higher expense growth rate over inflation means increased cost pressure; profit margins would therefore shrink further unless these costs are matched with revenue growth, thus requiring more effective cost-cutting strategies. Some effective cost control is being evidenced by the expense growth lower than inflation for the year 2020-21. This portrays that the company was reasonably efficient in managing costs without extravagant spending. Slightly above inflation in 2019-20, expense growth has marked a moderate increase in costs. Although not alarming, it indicates that the company would need to keep a closer watch on expenses to prevent increased costs in the future.

PERFORMANCE:

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1.Expenses outpaced revenue growth in 2023-24, which has the potential to cause shrinkage in profit margins.
2.Expenses are outgrowing revenues 2022-23, indicating higher costs, thereby affecting the profitability.
3.Cost pressures remain steep as expenses outrun revenues in the year 2021-22.
4.In 2020-21 wise financial management is seen in revenue growing faster than expenses.
5.In 2019-20 marginal uplift in expenses vis-a-vis revenue which might have reverse bearing on profit margins.

Interpretation:

In 2023-24, a growth rate in costs greater than revenue's (4.25% versus 3.97%) indicates that costs are on the rise faster than revenues. The unwatched eventual profit margins would be squeezed. Expenses grew even in 2021-22 and 2022-23 with a heavier growth rate than revenue, 22.61% and 23.80% respectively. Therefore, the reason the cost pressures have been tightening up-and might soon begin to squeeze profits-improvement in efficiency or increased revenue-now visible, must continue. For 2020-21, the company was in a position to handle inflation very well as the income increased (8.68%) more than the expenses (4.15%). This, therefore, means that the company has been moderate in its costs while the company moves into an era where it is economically certain for itself. The recession in 2019-20 can be seen from both ends; revenues and expenses increase marginally more in expenses than revenues (8.62%-8.12%).

Table 5.25

TCS

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation varied from 3.73% to 6.70%.

Expenses: As on date, suddenly increasing from ₹88,376 (2018-19) to ₹1,48,143 (2023-24).

Revenue: Increased at a higher rate from ₹1,23,170 (year 2018-19) to ₹2,02,359 (year 2023-24).

Differential: All differences are positive, with the maximum being recorded in 2022-23.

EGR: The highest EGR was recorded in 2022-23 (22.23%) and the lowest in 2023-24 (5.78%).

RGR: The highest for the year 2022-23 (18.72%) and the lowest for 2020-21 (3.55%).

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 5.78% Inflation: 5.22%.

Expenses raised a tad quicker than inflation which meant pressure on costs was minor. The implication is that operational costs are increasing just beyond the general levels of prices and thus require close monitoring.

2022-23: EGR: 22.23% Inflation: 5.65%.

Expenses increased at a very high speed when juxtaposed with inflation indicating severe cost pressures. Unless these pressures are controlled, they will affect profitability and financial viability.

2021-22: EGR: 17.63% Inflation: 6.70%.

Expenses have been growing at much higher rates than inflation pointing to increased operational costs. Cost control measures should be employed continuously for a healthy balance sheet.

2020-21: EGR: 2.86%. Inflation: 5.13%.

Expense growth hence less than inflation indicates good control of expenditure. The company managed its expenses so very well during this period, keeping the increase in expenditure below the price levels in general.

2019-20: EGR: 7.15%. Inflation: 6.62%.

Expenses went up a little above inflation indicating a pressure level of cost. So, while it is not so severe, it indicates the need to keep an eye on expenses spending.

Interpretation

The EGR in 2023-24 at 5.78% is slightly higher than the corresponding inflation rate of 5.22%. This means that expenses are rising just above inflation levels, implying that mild pressure exists on costs; however, it is still within a controllable range. EGR was 22.23% in 2022-23, which is significantly higher than the inflation rate of 5.65%. This means expenses have increased quite a lot compared to the general price level and thus are a clear indication of huge cost pressures. Likewise, in 2021-22 expenses increased by 17.63% well above that of the inflation rate, which stood at 6.70%, reinforcing the issue of increasing costs that may eventually hinder profits. In 2020-21, the EGR came to 2.86%, which is below the prevailing inflation rate of 5.13%. The finding indicates encumbered cost control as growth in expenses could not overtake the growth in general price levels. In the previous year, 2019-20, EGR stood at 7.15%, also above inflation, which was 6.62%, indicating moderate cost increases. In contrast, the previous year, which was 2018-19, GGR stood at 3.73% which coincided with inflation, showing that costs were well under control that particular year.

PERFORMANCE:

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1. In 2023-2024 revenue is just above the growing expense, which means that the company is able to control its cost effectively maintaining profits in the books.
2. In 2022-2023 such cases, revenue has increased as a nagging stretch from expenses bringing cost pressure with a likely margin reduction.
3. Revenue and expenses advanced at almost the same speed meaning there was a stability in profit margins in the year 2021-2022.
4. Revenue picked up more than expenses making a win on allocating less than 'waste' cost in 2020-2021.
5. Slightly too much, expenses outgrew revenues in terms of growth, signifying sluggish pressure on costs in 2019-2020.

Interpretation

The comparison of revenue growth rate (RGR) and expense growth rate (EGR) over the years provides insight into how well the company is managing inflation and cost control. In 2023-24, revenue grew at 6.31%, slightly outpacing expense growth at 5.78%, indicating effective cost management and stable profitability. Similarly, in 2020-21, revenue growth (3.55%) exceeded expense growth (2.86%), demonstrating efficient cost control and the company’s ability to maintain profit margins. However, in 2022-23, expense growth was significantly higher (22.23%) compared to revenue growth (18.72%), suggesting rising operational costs that could have squeezed profit margins. A similar trend was observed in 2019-20, where expenses (7.15%) grew faster than revenue (6.61%), indicating mild cost pressure. In 2021-22, both revenue (17.93%) and expenses (17.63%) grew at nearly the same rate, meaning the company maintained stable margins without significant profit deterioration. Overall, while the company effectively managed costs in certain years, such as 2023-24 and 2020-21, years like 2022-23 and 2019-20 highlight periods where expenses outpaced revenue growth, potentially impacting profitability.

Table 5.26

HCL Tech

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation Similar to previous tables:

Expenses: Increasing pattern, from ₹15,610 (2018-19) to ₹31,367 (2023-24).

Revenue: Increasing steadily, from ₹26,012 (2018-19) to ₹48,118 (2023-24).

Highest in EGR 2018-19 (28.53%) and the lowest in 2023-24(4.00%).

Highest in RGR during 2018-19(25.35%) and lowest in 2023-24(3.98%).

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 4.00%. Inflation: 5.22%

The expenses grow less than inflation so it represents a good cost-efficiency angle in the business. It has good control measures, which most of the times do bring cost inflation, but have a great impact in cushioning inflation costs.

2022-23: EGR: 17.65%. Inflation: 5.65%.

The cost had gone beyond inflation, making cost pressure like an operational cost hike, which was above the price line for the company and is expected to affect margins but is typical to the year under review.

2021-22: EGR: 19.71%. Inflation: 6.70%.

Increased the cost on expenses going at a higher rate than inflation-even poor management of this would put in peril its profitability and financial position.

2020-21: EGR: 6.73%. Inflation: 5.13%

To put it in simpler words, expenses have increased a little above inflation, which would mean low pressure in the costs. From a more practical sense, the operating expenses will require some monitoring.

2019-20: EGR: 28.53%. Inflation: 6.62%

Shows higher expenditures than inflation, but may indicate inefficient or raise costs beyond the organization's control. Signifies a possible source of the major escalation in costs, which would require mastery improvement on cost management strategies.

Interpretation

In 2023-24, the organization succeeds in controlling the expenses as the expense growth records (4.00%) fall below the inflation rate (for the last one year: 5.22%). This signifies just the effective cost management to ensure making a hit on rising prices to a negligible extent on operational costs. However, the expenses in 2022-23 and 2021-22 have risen in multiples compared to the inflation rate with a ratio of 17.65 and 19.71 percent, respectively, against the inflation of 5.65 to 6.70. Thus, rising cost pressures are indications, leaving a chance of reduced profits if they remain unmanaged. This indicates high expense growth in these years: a serious need arises to put into place much better cost containment strategies. In2020-21, the increase in expenses (6.73) was a bit higher than the inflation level (5.13) and denotes an increase which is quite minor. That is clearly not alarming, but there is a need for regular attention to prevent an escalation. The worst-case scenario will certainly stem from the year 2019-20, which reported an expense increase of 28.53% against an inflation base of 6.62%. Such disparities speak of tremendous cost pressures, which could well have dented profit margins. It suggests the company must have undergone some serious external cost hike or inefficiencies in managing operational expenses during that period. Overall, the company improved its cost control in 2023-24, but previous years reflected growing expenses on inflation. Eventually, it would have to control cost escalation and apply efficient cost management strategies for sustainable profits.

PERFORMANCE

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1. In 2023-24 expenses grew slightly faster than revenue, which could pressure profit margins.
2. Expenses increased at a higher rate than revenue in the year 2022-23, indicating cost pressures. Profitability might be affected.
3. In 2021-22 expense growth outpaced revenue growth, suggesting increasing operational costs.
4. Revenue growth was higher than expense growth, indicating effective cost management in the year 2020-21.
5. In 2019-20 expenses surged higher than revenue, leading to potential margin shrinkage.

Interpretation

In the fiscal year 2023-24, expenses were estimated to go up by 4.00%, while revenues were up by 3.98% only, highlighting how costs are growing marginally faster than revenues. Though it is a meager difference, constant monitoring is very essential to prevent cost overrun from slicing into profit margins. Expenses grew much faster in 2022-23 at a rate of 17.65% when revenues only grew at 13.87%. Such increasing operational costs put immense pressure on profitability, demanding better cost control. The same occurred in 2021-22, when expenses shot up at 19.71%, while revenues grew at only 13.92%. The significant gap between expense growth and revenue growth shows increasing cost pressure-poor management on this front will wipe margins down and potentially put financial stability at risk. In contrast, 2020-21 showed revenue growth (9.41%) outpacing expense growth (6.73%), indicating reasonable expense management. This spells further income generation while maintaining an even slower climb of expense growth. A good point for profits. Contrarily in 2019-20, expense growth (28.53%) surpassed revenue growth (25.35%) and consequently, adversely affected profit margins. This will then mean abysmal enforcement of cost controls-the need that strenuously stands if expenses are to be kept from breaking even on earnings. Expenses thus have seen higher growth than revenues in some years; something not under control will shrink profit margins

Note:

Difference 1 = Current year expenses – Previous year expenses

Difference 2 = Current year revenue – Previous year revenue

C. FINANCE SECTOR

Table 5.27

Axis

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary

Inflation's been hanging out between 3.73% (in 2018-19) and 6.70% (in 2021-22).

Revenue & expense: We've seen steady growth. Spending went up from ₹49,111 (2018-2019) to ₹94,687.43 (2023-24). Income also jumped from ₹54,985.77 to ₹1,09,368.63 in that same time.

Expense Growth Rate: Spending actually dropped a bit in 2020-21 (-3.56%) – probably because everyone was cutting costs during the COVID mess. Then it shot way up, hitting 36.01% in 2023-24.

Revenue Growth Rate: Income didn't grow much in 2020-21 (just 1.61%), but then it took off, hitting 26.39% in 2022-23 and 28.42% in 2023-24.

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 36.01%. Inflation: 5.22% Expenses jumped way more than inflation, so costs are definitely going up. If we don't get a handle on this, profits could shrink.

2022-23: EGR: 20.33%. Inflation: 5.65%

Operations got pricier much faster than inflation. This might mean things aren't running as smoothly as they could be, or maybe outside costs went up. We need to watch this closely so it doesn't hurt our bottom line.

2021-22: EGR: 9.61%. Inflation: 6.70% Expenses went up faster than inflation, but not by a ton. It's not as bad as some other years, but we should still think about ways to save money to stay in good shape.

2020-21: EGR: -3.57%. Inflation: 5.13% Expenses actually went down even though inflation was up. That means we did a good job keeping costs down.

2019-20: EGR: 11.45%. Inflation: 6.62% Expenses went up a little more than inflation, so costs are a bit of a worry. We should keep an eye on how much it costs to run things.

Interpretation

In 2022 and 2023, the only time expenses outpaced inflation was when the company dealt with rising operational costs that shot up more than general price increases. Failure to institute measures on cost could result in a general fall in the profit margin. Although expenditures in 2021-22 were generally greater than inflation, the difference was much smaller than previously, indicative of moderate cost pressures. In 2020-21, expenditures even came down, showing that the company successfully managed cost reductions despite inflationary pressures, and financial management was up to the task at that time. In 2019-20, costs kept creeping up slightly faster than inflation. This low level of upward pressure from increased costs should be viewed with interest. The ideal thing would be for costs to remain at or below the inflation rate. This is because increased cost levels above the general price levels could damage short-run profitability and long-term financial viability.

PERFORMANCE

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1. Expenses increased over revenue in 2023-24, thus, profit margins are contracting and cost pressures are increasing. The company needs to focus on cost control.
2. In 2022-23, revenue growth outpaced expense growth, indicating effective inflation management and profitability maintenance.
3. Knowing that revenue was growing faster in 2023-24 than expenses indicates that it managed inflation well on most fronts and earned its profits.
4. In 2021-22 expenses growing faster than revenue may squeeze the profit margin. The company may be advised to get a grip on its operational costs.
5. 2020-21 period saw a positive trend with revenue increasing while expenses declined, showcasing strong financial management.
6. Expenses decreased while revenue slightly increased, which is a good sign of cost control and financial management.
7. In 2019-20 revenue has grown slightly faster than expenses, signifying maintained cost management and healthy margins.

Interpretation

In 2023-24, expenses increased at a much higher rate (36.01%) compared to revenue (28.42%). This suggests that rising operational costs are outpacing revenue growth, which could result in shrinking profit margins if not managed properly. Such a trend highlights the necessity for cost-cutting measures or better resource utilization to sustain profitability. A similar pattern was noted in 2021-22, where expense growth (9.61%) outstripped revenue growth (5.86%), indicating cost pressures that may have affected the company’s financial stability. On the other hand, in 2022-23, revenue growth (26.40%) exceeded expense growth (20.33%), demonstrating effective financial management and cost control. This indicates that the company successfully navigated inflationary pressures and preserved healthy profit margins during that time. The most advantageous year for cost efficiency was 2020-21, when expenses fell (-3.57%) while revenue saw a slight increase (1.61%). This reflects strict cost control measures that enhanced profitability by lowering operational costs. Likewise, in 2019-20, revenue growth (13.91%) surpassed expense growth (11.45%), illustrating stable financial performance and effective cost management.

Table 5.28

HDFC

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation: Ranges from 3.73% (2018-19) to 6.70% (2021-22).

Revenue & Expenses: Revenue increased significantly from ₹98,972.05 (2018-19) to ₹2,58,340.56 (2023-24). Expenses also grew, from ₹76,848.2 (2018-19) to ₹2,13,194.11 (2023-24).

EGR: Expenses declined in 2020-21 (-0.69%), likely due to cost control during COVID-19.

A sharp rise in 2023-24 (74.18%), indicating expansion.

RGR: Revenue growth slowed in 2020-21 (5.26%) but rebounded in 2022-23 (26.48%) and peaked in 2023-24 (59.87%).

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 74.18%. Inflation: 5.22%

Spending went way up, faster than inflation. This means costs are probably squeezing profits if they don't get a handle on it.

2022-23: EGR: 31.35%. Inflation: 5.65%

Spending went up way more than inflation, which shows running the business is costing more. Maybe they're not being as careful as they could be, or things outside their control are getting pricey. They need to watch costs better.

2021-22: EGR: 5.06%. Inflation: 6.70%

They kept spending down as costs grew slower than inflation. That's a sign they're watching the money carefully.

2020-21: EGR: -0.70%. Inflation: 5.13%

Spending actually went down, even with inflation. That shows they cut costs and managed money well.

2019-20: EGR: 16.23%. Inflation: 6.62%

Spending went up faster than inflation, meaning it costs more to run things. This might squeeze profits, so they've got to keep an eye on it.

Interpretation

The comparison between the Expense Growth Rate (EGR) and inflation over the years reveals important trends in managing costs. In 2023-24, expenses surged by an astonishing 74.18%, far outpacing inflation at 5.22%. This hints at some serious cost issues that could put profits at risk if we don’t tackle them. Similarly, in 2022-23, expenses rose by 31.35%, while inflation was at 5.65%, again indicating that costs were increasing much more rapidly than general price levels. These patterns imply that the company might be facing inefficiencies or external cost increases, necessitating improved cost-management strategies. In contrast, the years 2021-22 and 2020-21 showed more controlled expenses, with EGR at 5.06% and -0.70%, respectively, both below inflation rates of 6.70% and 5.13%. This reflects strong financial discipline and cost efficiency during those periods. The negative expense growth in 2020-21 indicates that the company successfully reduced costs despite inflation, likely through strategic cost-cutting measures. However, in 2019-20, the expense growth rate was 16.23%, exceeding inflation at 6.62%, which points to rising operational costs. This trend suggests that the company has encountered sporadic periods of cost increases that need to be managed with long-term planning and financial oversight. In 2023-24 and 2022-23, we saw a big jump in expenses, which raises some serious concerns about our profits and financial health. This situation really emphasizes needing better ways to manage our costs. While previous years showed better cost efficiency, recent trends indicate that expenses are climbing at an unsustainable pace, and corrective measures should be implemented to align cost growth with inflation.

PERFORMANCE

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink.

1. In 2023-24, expenses have suddenly increased much faster than revenue with adverse impacts on profitability.
2. In 2022-23, cost is increasing faster than revenue; margins are under pressure.
3. Developing slightly faster than expenses suggests stable margins in the year 2021-22.
4. In 2020-21 revenue has expanded as the expenses have come down which signals cost efficiency.
5. More or less at the same rate that revenues and expenses were increasing were usually the periods of maintaining profitability in 2019-20.

Interpretation

In 2023-24 and 2022-23, the growth of expenses (74.18% and 31.35%, respectively) significantly outstripped revenue growth (59.88% and 26.48%). This indicates that operational costs are rising faster than revenue, which could put pressure on profit margins and overall financial stability. If this pattern continues, the company may encounter challenges in maintaining profitability unless it implements effective cost control measures. Conversely, in 2021-22 and 2020-21, revenue growth (5.70% and 5.27%) was either slightly higher than or comparable to expense growth (5.06% and -0.70%). This reflects a period of better cost management, where expenses were kept in check while revenue continued to grow. Notably, in 2020-21, expenses even decreased while revenue increased, demonstrating effective financial management and enhanced profitability. In 2019-20, both revenue and expenses grew at nearly the same rate (16.01% vs. 16.23%), indicating stable financial performance without significant margin pressure. Overall, the recent trend of expenses increasing faster than revenue (in 2023-24 and 2022-23) is worrisome, as it could lead to shrinking profit margins. The company should prioritize controlling operational costs, enhancing efficiency, and optimizing expenditures to ensure that revenue growth leads to sustainable profitability rather than being negated by rising expenses.

Table 5.29

ICICI

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Summary:

Inflation: Ranges from 3.73% (2018-19) to 6.70% (2021-22).

Revenue & Expenses: Both revenue and expenses show consistent growth, except for a slowdown in 2020-21 (COVID-19 impact).

EGR: Negative growth in 2020-21 (-2.30%), reflecting cost-cutting during COVID-19.

Strong recovery in 2022-23 (21.83%) and 2023-24 (34.68%), suggesting expansion.

RGR: Slower growth in 2020-21 (5.77%), but accelerated in 2022-23 (26.46%) and peaked in 2023-24 (30.81%).

Analysis

Comparing Expense Growth rate (EGR) with Inflation.

- If expense growth rate is greater than inflation, costs are rising faster than prices.
- If costs are growing more slowly than inflation, the company is doing well.

2023-24: EGR: 34.69%. Inflation: 5.22%.

Expenses are at a very high level compared with the already high inflation levels. If costs are not correctly controlled, they will press on profitability margins and in turn, give a bad picture overall financial stability.

2022-23: EGR: 21.84%. Inflation: 5.65%

Operating costs have risen by more than the general price index, which typically means the internal inefficiencies are continued or something was pushed up outside the company. This needs to be monitored closely so that risks do not arise on profitability.

2021-22: EGR: 6.41%. Inflation: 6.70%

Costs have grown less than inflation against a normal expectation, indicating reasonable cost control in the case. Careful localization will help the company to gain the advantage of financial stability and keep expenses growing at inflationary rates.

2020-21: EGR: -2.31%. Inflation: 5.13%

Costs have reduced in spite of inflation, indicating effective cost control strategy within the company. It indicates that cutting costs during periods of adversity has benefited the company's financial position.

2019-20: EGR: 15.92%. Inflation: 6.62%

Expenses increased by a much higher rate as compared to inflation indicating inefficiencies or increased operating cost. Thus, the cost structure needs to be evaluated so that business remains profitable.

Interpretation

In 2023-24, the Expense Growth Rate (EGR) at 34.69% is significantly higher than the inflation rate of 5.22%, indicating that expenses are increasing at a much faster rate than general price levels. This points to heightened cost pressures that could affect profit margins if not managed effectively. In 2022-23, the EGR of 21.84% also surpasses inflation at 5.65%, marking another year where rising cost outpace inflation. This trend suggests that operational expenses are escalating quickly, which may impact profitability. In 2021-22, the EGR at 6.41% is slightly below inflation at 6.70%, indicating that cost increases are somewhat in line with inflation. This reflects better cost control compared to the previous two years. In 2020-21, the EGR is negative at -2.31%, while inflation stands at 5.13%. This suggests that the company effectively reduced expenses despite inflationary pressures, showcasing strong cost management. In 2019-20, the EGR of 15.92% is significantly higher than the inflation rate of 6.62%, indicating rising expenses and potential inefficiencies. In 2018-19, while the EGR is not available, inflation is at 3.73%, suggesting that expenses may be growing at a moderate pace.

PERFORMANCE

Comparing the growth in revenue versus the growth in expenses

- If revenue growth is greater than expense growth, the company is managing inflation well.
- If expense growth is greater than revenue growth, profit margins may shrink

1. In 2023-24, EGR is higher than RGR which indicates that compared to these years, expenses are rising higher in comparison with the revenues thereby resulting in profit margin erosion as well as possible deterioration of the financial position.
2. Revenue Growth Rate is higher than Expense Growth Rate in 2022-23. This means that the revenues grew at a greater rate than expenses, showing good financial management and effective cost control.
3. Revenue Growth is greater than Expense Growth in 2021-22. Revenue growth is just more, as compared to expense growth, this can be interpreted that the financial performance has been balanced.
4. Both Revenues and RGR are up by 5.78% except for a negative growth rate of -2.31% in EGR. RGR is more than EGR, which shows that the income grows but expenses decrease, overall signifying good cost control and higher profitability.
5. The income growth of 17.98% in 2019-20 was greater than that in expenses at 15.92%. Hence, RGR is higher than EGR resulting in stable profit margins.

Interpretation

In 2023-24, the growth rate of expenses (34.69%) surpassed that of revenue (30.81%), indicating that the company's costs rose more quickly than its income. This trend could result in shrinking profit margins, raising concerns about financial sustainability. If this pattern persists, it may exert pressure on overall profitability. The company should focus on implementing cost control measures to avoid excessive spending that could erode earnings. In 2022-23, revenue increased by 26.46%, while expenses rose by 21.84%, demonstrating a healthy balance between revenue and cost growth. This indicates that the company effectively managed its costs while still expanding its operations. Sustaining this trend is crucial for ensuring steady profit margins and financial stability. During 2021-22, revenue growth (9.17%) slightly exceeded expense growth (6.41%), suggesting moderate improvements in profitability. Although the gap between revenue and expense growth was not substantial, it still shows that the company was able to grow without allowing expenses to rise uncontrollably. This reflects stable financial management, although ongoing cost monitoring remains essential. The year 2020-21 stood out for its financial efficiency. Revenue grew by 5.78%, while expenses actually decreased by -2.31%, showcasing excellent cost control measures. This indicates that the company managed to increase its income while simultaneously cutting costs, resulting in enhanced profitability. Such efficiency is advantageous, but the company must ensure that cost reductions do not compromise operational performance or growth opportunities. In 2019-20, revenue growth (17.98%) outpaced expense growth (15.92%), highlighting a well-managed balance between income and costs. The company successfully boosted its earnings while keeping cost increases within a manageable range. This suggests that operational efficiency was upheld, supporting stable profit margins.

Note:

Difference 1 = Current year expenses – Previous year expenses

Difference 2 = Current year revenue – Previous year revenue

SECTOR-WISE PERFORMANCE ANALYSIS

A. RETAIL:

Table 5.291

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.23

Illustrations are not included in the reading sample

Retail Sector (0.8474):

The correlation is strong but lower than IT and Finance.

This suggests that while higher expenses do lead to higher revenue, the relationship is not as consistent as in IT and Finance. Retail is influenced by market demand, competition, and consumer spending behaviour. Inflation and changing consumer preferences might impact revenue unpredictably.

B. IT SECTOR

Table 5.292

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.24

Illustrations are not included in the reading sample

IT Sector (0.9875):

Highest correlation among the three sectors.

This means that when expenses increase, revenue almost always increases proportionally. Possible reasons are that IT companies invest heavily in technology, R&D, and skilled labour. These investments directly impact revenue growth, as digital services and software have a high profit margin. Inflation hits the IT industry less hard than it does retail

C. FINANCE SECTOR:

Table 5.923

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.24

Illustrations are not included in the reading sample

Finance Sector (0.9862):

Its’s about the same high correlation.

This means that when financial institutions increase expenses (e.g., marketing, expansion, digital transformation), revenue follows closely. Growth in finance depends on loan disbursement, interest rates, and financial services demand. Higher expenses in expanding operations, customer acquisition, and technology adoption lead to higher revenue growth The financial sector feels the impact of inflation less than the retail sector.

After calculating the correlation between Expense Growth Rate (EGR) and Revenue Growth Rate (RGR) for the three sectors, we have the following results:

Table 5.294

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

IT and Finance are performing the best because they have a very strong correlation (~0.99). This suggests that these industries are efficiently converting expenses into revenue growth. Retail is slightly weaker (0.85), meaning higher expenses don’t always guarantee higher revenue, possibly due to inflation, changing consumer demand, and competition.

Standard Deviation Values for Each Sector:

Table 5.295

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Retail Sector is Highly Volatile. The highest standard deviation means retail companies experience large fluctuations in both expenses and revenue. This makes the sector risky since performance can change from year to year.

IT Sector is Most Stable. The lowest standard deviation means IT companies have steady growth, making it the least risky sector.

Finance Sector has Moderate Stability. The finance sector is more stable than retail but still has some risk, as expenses and revenue fluctuate more than IT but less than retail.

INTERPREATION

The IT sector stands out as the best-performing sector due to its remarkable stability, minimal risk, and strong correlation between expenses and revenue. Unlike other industries, IT experiences the least fluctuation in both costs and income, making it a low-risk investment option. The sector is highly predictable since its income and costs usually go hand in hand, which helps keep its financial performance steady. This stability, coupled with continuous technological advancements and increasing global dependence on digital solutions, makes IT the most reliable and sustainable sector for growth. The finance sector emerges as a strong contender, ranking just behind IT in terms of performance. It exhibits a very strong correlation between expenses and revenue, nearly matching that of the IT sector. While finance carries a moderate level of risk—higher than IT but lower than retail—it still maintains a relatively stable environment. The sector’s performance is influenced by economic conditions, interest rates, and regulatory policies, making it less consistent than IT. However, its strong fundamentals and ability to generate steady revenue make it an attractive investment option. On the other hand, the retail sector is the most volatile among the three. It faces remarkable fluctuations in expenses and revenue, leading to a high-risk environment. Unlike IT and finance, retail exhibits a weaker correlation between expenses and revenue, making it less predictable. Various factors such as changing consumer preferences, seasonal trends, and economic conditions heavily impact retail performance. While the sector can deliver high returns during favorable periods, it lacks the stability of IT and finance, making it a more uncertain investment choice.

5.3 TO KNOW HOW SHARE PRICES REFLECTED PRE AND POST COVID

5.31 DESCRIPTIVE STATISTICS OF EACH SECTOR:

Table 5.311

RETAIL SECTOR

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researcher

Table 5.312

IT SECTOR

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Table 5.313

FINANCE SECTOR

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

5.32 VOLATILITY ANALYSIS OF EACH SECTOR

A. RETAIL SECTOR

- Using standard deviation of each year we calculated volatility of each sector over the years

Table 5.321

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig. 5.321

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Analysis:

1. Adani's Performance:

- Adani experienced high growth between 2018-2019 and 2019-2020 (571.58%).
- There was a steep rise in 2020-2021 (265.84%), then a steep fall in 2021-2022 (-72.59%).
- There was a recovery in 2022-2023 (181.24%), and the growth continued through 2023-2024 (113.73%).

2. Trent's Performance:

- Trent saw consistent growth from 2018-2019 to 2019-2020 (497.66%).
- The growth decelerated in 2020-2021 (8.81%) but bounced back in 2021-2022 (26.59%).
- There was a minor drop in 2022-2023 (-3.51%), followed by an unprecedented rise in 2023-2024 (536.76%).

3. Titan's Performance:

- Titan grew slowly from 2018-2019 to 2019-2020 (24.78%) and experienced huge growth in 2020-2021 (127.13%).
- The growth reached a peak in 2021-2022 (73.96%) but dipped sharply in 2022-2023 (-49.07%).
- Recovery was observed in 2023-2024 with a rise of 81.80%.

4. Volatility Observations:

- Trent reflected the highest volatility, especially its spectacular rise in 2023-2024.
- Adani witnessed high fluctuations, especially in the fall of 2021-2022 and then recovery.
- Titan reflected relatively stable growth in comparison to Trent and Adani but still experienced significant ups and downs.

Interpretation:

The figures showcase the financial performance and volatility of three firms—Adani, Trent, and Titan—over six years, from 2018 to 2024.

Adani registered high growth in the early years, with a peak in 2019-2020 and continued momentum through 2020-2021. It then suffered a steep contraction in 2021-2022, possibly due to market adjustments or extrinsic factors influencing its valuation. The firm recovered strongly subsequently, reflecting stability and possible strategic realignments.

Trent showed steady growth up to 2019-2020 but decelerated sharply in subsequent years, only to see a record spike in 2023-2024. This unforeseen increase may reflect a massive breakthrough, including new business prospects or good market conditions catapulting its valuation astronomically.

Titan recorded comparatively consistent growth against the other two firms, with significant highs in 2020-21 and 2021-22 before experiencing a drop in 2022-23. Its bounce back in the previous year indicates stabilization and investor confidence again.

The volatility analysis underscores Trent's dramatic fluctuations, making it the most unpredictable among the three companies, while Titan appears comparatively stable despite its ups and downs. Adani falls between the two extremes, showcasing both significant declines and recoveries.

Overall, while all three companies have shown remarkable growth over the years, their trajectories reflect varying levels of risk and reward for investors based on their respective market dynamics and strategic decisions.

B. IT SECTOR

- Using standard deviation of each year we calculated volatility of each sector over the years

Table 5.322

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.322

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Analysis:

1. Volatility Trends Across Firms:

- Infosys: Volatility rose sharply from 2019-2020 (848.6979) to 2020-2021 (3806.7109), then fell in 2021-2022 (2638.929) and 2022-2023 (1417.169). It rose slightly in 2023-2024 (2079.338).

- TCS: Higher volatility throughout compared to Infosys and HCL, highest in 2020-2021 (7167.295). Then it fell consistently up to 2022-2023 (2870.321) but increased again in 2023-2024 (4743.224 ).
- HCL: Volatility was fairly low in the beginning, with a high of 2020-2021 (2729.621). It went down sharply in 2021-2022 (1926.24) and 2022-2023 (1171.201) and rose again in 2023-2024 (3085.29).

2. Key Observations:

- The year 2020-2021 recorded the highest volatility for all three companies, most probably due to market disturbances or external shocks.
- TCS registered higher volatility persistently against Infosys and HCL during the period.
- HCL recorded the lowest overall volatility but also experienced significant fluctuations.

3. Comparative Analysis:

- Infosys and HCL shared the same trend of sudden spikes followed by dips, while TCS reported consistently higher volatility levels during the period.
- The post-pandemic recovery phase (from 2022 onwards) indicates stabilization with modest rebounds.

Interpretation:

Six-year volatility analysis of Infosys, TCS, and HCL shows outstanding trends based on market forces and outside influences. Between 2018 and 2019, each of these firms had lower-than-average volatility, reflecting strong market stability. But the subsequent year witnessed marginally higher trends for all of them, notably TCS and HCL.

2020-2021 was a sharp peak in volatility for all three companies, with TCS at its highest at 7167.295, then Infosys at 3806.7109 and HCL at 2729.621. The reason for the spike is worldwide disruptions like the COVID-19 pandemic, which led to widespread uncertainty and fluctuation in share prices.

From 2021-2022 onwards, there was a significant drop in volatility for all companies, indicating stabilization as markets adapted to post-pandemic recovery stages. While Infosys and HCL registered consistent declines during this period, TCS recorded relatively higher levels of volatility.

In the last year, i.e., 2023-2024, there was a resurgence in volatility levels for all three companies, with TCS still topping the chart at 4743.224 and HCL at 3085.29 and Infosys at 2079.338. This could be a sign of fresh market activity or a change in investor sentiment.

Overall, the information emphasizes that TCS repeatedly displayed higher volatility compared to Infosys and HCL, implying increased sensitivity to market fluctuations or outside forces affecting its stock performance. Conversely, HCL presented relatively stable tendencies with lower aggregate volatility levels but still exhibited market-wide tendencies in times of dislocation or rebound.

C. FINANCE SECTOR

- Using standard deviation of each year we calculated volatility of each sector over the years.

Table 5.323

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Fig.5.323

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Analysis:

1. HDFC:

- Registered a sharp rise from 704.3717 in 2018-2019 to the highest point of 3609.046 in 2020-2021.
- Fell sharply in 2021-2022 (1079.023) but recovered partially by 2022-2023 (1815.39), followed by a minor fall in 2023-2024 (1461.542).

2. Axis:

- Recorded moderate growth from 1140.265 in 2018-2019 to a high of 2004.188 in 2020-2021.
- Witnessed a sharp fall in 2021-2022 (673.9948) but bounced back strongly by 2022-2023 (1520.985). A minor dip followed in 2023-2024 (1191.869).

3. ICICI:

- Grew steadily from 580.4625 in 2018-2019 to a high of 1643.346 in 2020-2021.
- Declined moderately from 1062.309 in 2021-22 to end at its lowest point of the period, 801.2222, by 2023-24.

4. Volatility Observations:

- HDFC exhibited the highest volatility due to its dramatic rise and subsequent decline.
- Axis displayed moderate fluctuations with more consistent recovery trends.
- ICICI was the most stable of the three but nonetheless experienced significant drops following its peak.

Interpretation:

The performance chart of HDFC, Axis, and ICICI over six financial years presents clear trends of growth and volatility across sectors.

Then, HDFC, Axis, and ICICI are financials with distinct divergences in performance. HDFC saw the highest volatility of the three, a quick climb followed by sharp falls and partial bounces back—perhaps a representation of macroeconomic considerations or sector-level issues affecting its valuation. Axis Bank exhibited mild fluctuations but maintained a solid recovery from its trough, indicating strength despite market pressures. ICICI Bank was the most stable in general but closed the period on a downward note after having earlier reached a peak.

Volatility analysis highlights the fact that such companies as Trent and Adani provide high returns but are accompanied by heavy risks owing to their volatile paths, whereas institutions such as ICICI are more reliable for investments although they suffer from cyclical downswings. These observations bring to the fore the need to match investment approach with personal risk bearing capacity and market situation in regard to investment in these companies for portfolio diversification or long-term returns.

5.33 CONSOLIDATED AVERAGE PRICES OF SECTORS OVER THE YEARS:

Table 5.331

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

5.34 Average Share Price Reflection of Each Sector

A. RETAIL SECTOR:

Table 5.341

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

- The table presents the average prices of Adani, Trent, and Titan from 2018-2019 to 2023-2024.

Fig.5.341

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Analysis:

- Titan has the fastest growth path of the three. Beginning at a level of about 1000 in 2018-2019, its share price consistently increased until 2020-2021 and then shot up sharply from 2021-2022 onward. In 2023-2024, Titan's share price touched close to 3500, which reflects high investor confidence and superior financial performance. The sudden three-year jump reflects growing market share, high earnings, or better industry trends .
- Trent exhibits a consistent rising trend from under 500 in 2018-2019. Its growth was steady but gradual until 2020-2021, and then dramatically increased afterward. The share price had crossed 2000 by 2023-2024, indicating higher market valuation and increasing investor demand. The steep spike in recent times may be due to business growth, increased revenues, or favourable market perception in the industry .
- Among the three stocks, Adani has the slowest growth in terms of share price. Starting below 500 in 2018-2019, its price increased gradually over the years. Unlike Titan and Trent, Adani’s share price has not experienced a steep rise, staying below 1000 even in 2023-2024. This indicates a comparatively slower growth rate, which could be due to market volatility, sector-specific challenges, or limited expansion.

Interpretation:

The share price trends of Adani, Trent, and Titan over the past few years reflect unique patterns of growth and market performance. Titan's quick escalation in share value, particularly since 2021, reflects good financial growth, rising investor confidence, and even market leadership possibilities. Growth strategies, robust earnings, and positive industry environment might have driven this upswing.

Trent also demonstrates a good growth trend, with its stock price increasing over four times during the period. The sharp rise in recent years indicates favourable market sentiment, expansion of business, or strategic initiatives resulting in improved financial performance.

In contrast, Adani's comparative slower growth reflects a more stable but less voracious stock performance. The absence of a dramatic climb may be evidence of minimal growth, more moderate revenue increase, or other outside market pressures that affect its value.

B. IT SECTOR

Table 5.342

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

- The table presents the average prices of Infosys, TCS, and HCL Tech from 2018-2019 to 2023-2024.

Illustrations are not included in the reading sample

Analysis:

Source: data analysis done and compiled by the researchers

- The given line chart represents the average share prices of three IT companies—Infosys, TCS, and HCL Tech—over the years from 2018-2019 to 2023-2024.
- The y-axis denotes the average share price, while the x-axis shows the corresponding years. The chart indicates a general upward trend for all three companies, with some fluctuations.
- HCL Tech consistently has the highest share price among the three companies, showing significant growth from 2018-2019 to 2021-2022 before stabilizing.
- TCS and Infosys show a similar pattern, with TCS having a higher price than Infosys, but experiencing a decline after 2021-2022 before slightly recovering in 2023-2024.

Interpretation:

The data suggests that the IT sector has seen a steady rise in share prices over the years, with a peak around 2021-2022. This period might correspond to high demand for IT services, possibly due to digital transformation initiatives and pandemic-driven technology adoption. However, a decline in TCS and Infosys’ share prices after 2021-2022 indicates potential market corrections, economic slowdowns, or industry-specific challenges. The recent uptick in 2023-2024 for Infosys and TCS might suggest renewed investor confidence. HCL Tech, despite some fluctuations, maintains a strong position, highlighting its resilience and possibly better market performance compared to its competitors.

C. FINANCE SECTOR:

Table 5.343

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

- The table presents the average prices of Axis, HDFC, and ICICI from 2018-2019 to 2023-2024.

Fig. 5.343

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Analysis:

- The line graph shows the average share prices of HDFC, AXIS, and ICICI for a time period ranging from 2018-2019 to 2023-2024.
- AXIS, shown by the blue line, shows a steady growth trend, which reflects strong and consistent growth
- It is seen that there is a steep rise between 2020-2021 and 2021-2022, and then the growth becomes steady but remains in an increasing trend.
- HDFC, marked by the orange line, displays a consistent growth, with slight stagnation during 2019-2020 and 2020-2021, and then sustained growth.
- ICICI, marked by the green line, rises until 2019-2020, falls in 2020-2021, and then takes an increasing trend like HDFC.
- Overall, AXIS has the highest value, followed by ICICI and then HDFC, showing varied growth patterns for the three parties.

Interpretation:

The uniform growth in post-2020-2021 AXIS's share price points towards solid financial performance, investor trust, or market trends supporting the organization. The apparent rise after 2020-2021 may reflect major business expansion, economic turnaround, or policy reform that positively influenced its share price. HDFC's consistent development with some slow growth reflects less vulnerability and sound financial handling. ICICI’s initial peak followed by a dip suggests external economic influences or industry-specific challenges, but its subsequent recovery highlights a regained momentum. The overall trend for all three companies points to long-term market growth, with AXIS leading in performance, HDFC showing sustainable progress, and ICICI recovering from past fluctuations

5.35 NORMALITY TESTS OF EACH SECTOR:

A. RETAIL SECTOR

Shapiro-Wilk Test Results:

Table:5.351

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Interpretation of P-Values: A P value greater than 0.05 suggests that any deviation from a 'normal distribution' is not significant. The p-values for all three datasets (Retail A, Retail B, and Retail C) exceed 0.05, which indicates that they are likely normally distributed.

Observations:

W-Statistic: This measure how well the data aligns with a normal distribution, with values closer to 1 indicating a better fit. - p-Value: This reflects the likelihood of observing the data under the null hypothesis of normality. If the p-value is greater than 0.05 (α = 0.05), we do not reject the null hypothesis, implying normality. - Normality: A normal distribution is characterized by a mean that is at the centre point, suggesting that the three datasets are likely normally distributed at the 0.05 significance level.

Normality Curves

Fig.5.351

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Interpretation:

The histograms (blue bars) represent the data distribution for each column, while the red curve shows the corresponding normal distribution fit.

Column Breakdown:

Retail 1

Mean (μ): ~585.63

Std Dev (σ): ~225.62

The histogram closely aligns with the red normal curve, indicating the data is approximately normal.

Retail 2

Mean (μ): ~1022.47

Std Dev (σ): ~719.41

The histogram aligns reasonably well with the normal curve, suggesting a decent fit.

Retail 3

Mean (μ): ~1760.39

Std Dev (σ): ~852.76

The histogram shows some deviations, particularly in the tails, but it still fits the normal curve reasonably well.

Q-Q Plot Analysis:

Fig.5.352

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

The Q-Q plots for each column provide a visual assessment of the normality of the data. Here’s the breakdown:

Retail A

- The points mostly align with the red line, indicating a relatively normal distribution.
- Minor deviations at the tails suggest slight skewness.

Retail B

- The data generally follows the normal line, though there are some deviations at higher values.
- A slight positive skew may be present.

Retail C

- The Q-Q plot shows more deviation from the normal line at higher values.
- Potential right-skewed distribution due to larger data values.

Observations

- All three columns show data distributions that closely resemble a normal distribution, as evidenced by their alignment with the red diagonal line in the Q-Q plots.
- These visual observations align with the results of the Shapiro-Wilk test, which also indicated that all columns exhibit normality.

B. IT SECTOR:

Shapiro-Wilk Test Results:

Table 5.352

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Interpretation:

If p-value > 0.05, the data is likely normally distributed. If p-value ≤ 0.05, the data significantly deviates from normality. The p-value in all cases is greater than 0.05, meaning we fail to reject the null hypothesis. This suggests that all three datasets follow a normal distribution at a 5% significance level.

Normality Curves

Fig. 5.353

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Here are the normality curves for each dataset (IT 1, IT 2, and IT 3):

- The histograms (blue bars) represent the actual distribution of the data.
- The red dashed line represents a fitted normal distribution curve for comparison.
- The smooth blue curve is the KDE (Kernel Density Estimate), which shows the shape of the data.

Q-Q Plot Curve

Fig.5.354

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Q-Q Plot Analysis:

- The blue dots represent the dataset's quantiles, while the red line indicates the expected quantiles from a normal distribution.
- The data appears to be fairly typical if the points closely align with the red line.

Observation

All three datasets have p-values greater than 0.05, indicating normality based on the Shapiro-Wilk test.

- The fitted normal curves and histograms with KDE suggest a general normality with some minor variations.
- While there were slight deviations in the middle and tails, the Q-Q plots predominantly conformed to the normal distribution.
- IT 2 and IT 3 showed minor irregularities, whereas IT 1 was the closest to a normal distribution.
- Overall, the dataset is approximately normal, with a few minor irregularities that are expected

due to the small sample size.

C. FINANCE SECTOR

Shapiro-Wilk Normality test

Table 5.353

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Analysis

- The W-Statistic measures how well the data follows a normal distribution, with values closer to 1 indicating better fit.
- The p-Value is compared against a significance level (α = 0.05).

Key Observations

- For all three columns (Finance A, B, and C), the p-values are greater than 0.05, indicating no significant evidence to reject the null hypothesis that the data follows a normal distribution.
- Therefore, the data appears to be normally distributed for all columns based on the Shapiro-Wilk test.

Normality Curves

Fig.5.355

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Here are the normality curves for each financial column:

1. Finance A: The histogram aligns closely with the red normal curve, with a mean (μ) of approximately 1333.89 and standard deviation (σ) of 201.11.
2. Finance B: The data also shows a good fit to the normal curve, with μ ≈ 620.48 and σ ≈ 232.40.
3. Finance C: The curve appears smoother and well-aligned with μ ≈ 730.85 and σ ≈ 150.74.

These visualizations further support the Shapiro-Wilk test results, confirming that the data for all columns follows a normal distribution.

Analysis

- The points closely align with the red reference line, indicating that the data follows a normal distribution fairly well.
- However, there are minor deviations at the tails, which could suggest slight departures from perfect normality.

Q-Q Plot Curve:

Fig.5.356

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Finance A: The data seems to align closely with a normal distribution, indicating a reasonable fit.

Finance B: There are some deviations from normality, particularly noticeable at the extremes.

Finance C: There is a significant departure from the normal distribution, especially in the upper quantiles.

5.36 TWO FACTOR ANOVA WITH REPLICATION:

Table 5.361

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Results:

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Interpretation:

Levene’s Test of Equality of Error Variances was conducted to assess whether the variance of the dependent variable (VAR00006) was equal across different groups. The results indicate that, based on the mean, the test was statistically significant (F (17, 36) = 4.950, p < .001), suggesting that the assumption of homogeneity of variance was violated. Similarly, when using the trimmed mean, the test remained significant (F (17, 36) = 4.527, p < .001). However, when using the median, the test was not significant (F 17, 36) = 1.175, p = .331) and remained non-significant with adjusted degrees of freedom (F (17, 6.524) = 1.175, p = .444). These results indicate that while variance differences are evident based on the mean and trimmed mean, they are not as pronounced when using the median-based approaches. This suggests that potential violations of homogeneity of variance may be driven by extreme values or skewed distributions. The test was conducted within a model that included the intercept and main effects of VAR00002, VAR00004, and VAR00003, as well as their two-way and three-way interaction terms.

TEST OF BETWEEN-SUBJECTS EFFECTS:

Fig.5.361

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Interpretation:

Analysis of variance (ANOVA) results are essential in terms of providing insights regarding the determinants of the dependent variable (VAR00006). The main intention was to analyse how various determinants, such as Sector (VAR00002), Company (VAR00003), and Period (VAR00004 - Pre/Post COVID), affect the dependent variable. Depending on statistical significance (Sig.) values from the ANOVA table, we can explain the findings in detail.

3.7 AVERAGE PRICES ANALYSIS OF ALL THREE SECTORS

Fig.5.362

Illustrations are not included in the reading sample

Source: data analysis done and compiled by the researchers

Interpretation:

The chart shows the average share prices of three industries—Finance, IT, and Retail—across the years 2018-2019 to 2023-2024. Each industry has a different growth trend, giving insights into market trends, sectoral performance, and investor sentiment over time.

1. IT Sector (Red Line – Highest Performer):

The IT sector begins at a relatively high value of approximately 3000 in 2018-2019 and maintains a steady growth pattern. The biggest growth is between 2020-2021 and 2021-2022, when the share price goes beyond 6000. But after hitting its peak, there is a minor decline in 2022-2023, suggesting either a market correction, profit booking, or external economic influences on the industry. By 2023-2024, the IT sector recovers marginally and closely follows the Retail sector.

Reasons why IT Sector will Grow:

Tech adoption boom following and during the pandemic, generating huge demand for IT services.

Digital transformation patterns among companies propelling IT expenses.

Robust revenue growth coupled with high-profit margins for IT firms.

Market corrections in subsequent years due to saturation, economic downturns, or decreased outsourcing needs.

2. Retail Sector (Green Line – Fast Growth in Latter Years):

The Retail sector begins lower than both IT and Finance at approximately 1500-2000 in 2018-2019. It has moderate growth up to 2020-2021, from where a sharp rise is seen from 2021-2022 onwards. By 2023-2024, it reaches almost 6500, making it the fastest-growing industry of the recent years.

Reasons for Retail Sector Growth:

Expansion in e-commerce and digital sales resulting in higher profitability.

Post-pandemic consumer spending boom, resulting in increased retail industry valuations.

International and domestic retail market growth, with firms embracing omnichannel approaches.

Investment inflows and increasing demand for retail shares.

3. Finance Sector (Blue Line – Slowest Growth but Stable):

The Finance sector begins near 2000 and has a steady, gradual rise in the years. It does not have any sudden leaps or drops, reflecting stability but slow growth. By 2023-2024, the Finance sector is at about 3500, which is significantly less than that of IT and Retail.

Probable Reasons for Finance Sector's Slower Growth:

Regulatory limitations and economic cycles impacting financial institutions.

Interest rate fluctuations and inflation effects, resulting in moderate growth in financial stocks.

Stable but restrained growth in banking and insurance industries versus tech and retail.

Investor bias towards high-growth industries such as IT and Retail, resulting in reduced price appreciation.

- The trends reveal that IT and Retail are having a high growth, return-maximizing sectors, while Finance is a lower-growth stable investment opportunity. The Retailing sector's latest upsurge reflects a market preference change potentially caused by improving consumer expenditure, online retailing growth, and increasing profitability. Investors may consider IT to be a mature and risky sector, Retail to be an emerging growth leader, and Finance to be a riskless, steady one.

6. FINDINGS AND SUGGESTIONS

6.1 Findings

- Steady Growth: The retail sector has shown steady growth from 2018-2019 through to 2023-2024.
- Post-2020 Surge: A notable spike in revenue was seen after 2020-2021, indicating a recovery and expansion in the economy.
- GDP Contribution Increase:
- 2018-2019 to 2020-2021: Retail's contribution to GDP held steady at 14%, reflecting slow growth or economic hurdles.
- 2023-2024: Retail's share of GDP climbed to 22%, underscoring its growing importance in the economy.

Revenue Boom:

- 2021-2022: $35,297.41 million
- 2023-2024: $65,847.22 million

Growth Factors:

- Economic recovery following the pandemic
- Increased popularity of digital and online shopping
- Expansion efforts by retail companies

Retail’s Role in Economy:

While retail is growing, other sectors still command a significant share of GDP, yet retail is emerging as a key economic player.

- Economic Shift: The growing impact of retail is fuelled by urbanization, rising disposable incomes, and advancements in digital technology.

Consistent Revenue Growth in the IT Sector:

- 2018-2019: $222,289 million
- 2023-2024: $379,410 million
- The sector has experienced significant growth due to the increasing global dependence on technology, digital services, and automation.

Fluctuating GDP Contribution:

- Reached a peak of 134% in 2022-2023, then slightly decreased to 128% in 2023-2024.
- This indicates that while revenues are on the rise, the direct contribution to GDP can vary because of reinvestment and operational expenses.
- Post-2020 Growth Acceleration:
- Fuelled by trends in digital transformation that emerged after the COVID-19 pandemic.
- There has been a notable increase in the adoption of remote work solutions, cloud computing, cybersecurity, and e-commerce.

Revenue Growth vs. GDP Contribution:

- Despite the surge in revenue, the GDP contribution did not increase at the same rate.
- This suggests that a significant portion of revenue is being reinvested into research and development, workforce growth, and expanding into global markets rather than directly boosting GDP.

Diversified Economic Impact:

- The IT sector continues to be a vital economic driver, but other sectors are also growing, leading to a more balanced and diversified national economy.

Steady Revenue Growth in Finance:

- 2018-2019: $217,359.01 million
- 2023-2024: $510,600.13 million
- The consistent increase points to growth in banking, investment, insurance, and fintech.

Stagnant GDP Contribution Until 2022-2023:

- The contribution remained at 1% from 2018-2019 to 2022-2023, even with rising revenues.
- It doubled to 2% in 2023-2024, indicating a significant shift for the sector.
- Period of Rapid Growth (2021-2022 to 2023-2024):
- Revenue jumped from $281,504.49 million to $510,600.13 million.
- This surge was fuelled by the adoption of fintech, mobile banking, digital payments, and increased foreign direct investment in financial services.
- Comparative Economic Role:
- Even with revenue growth, the finance sector’s share of GDP is still less than that of retail, manufacturing, and services.
- The increased contribution in 2023-2024 (2%) suggests a deeper integration into the national economy.

Key Growth Drivers:

- Supportive government policies and economic reforms.
- Better access to banking and credit.
- Rising demand for loans, mortgages, and investment products.
- Digital financial services are making transactions more efficient.
- Impact of Digital Transformation (2021-2024):
- Growth has coincided with the rise of cashless transactions, financial literacy initiatives, and improved banking regulations.
- Enhanced risk management and lending practices may have also played a role in boosting sector performance.

Expense Growth Exceeding Inflation in retail:

- Expenses have generally increased at a rate faster than inflation, creating cost pressures and the risk of reduced margins.
- In 2022-23 (Table 2), expense growth reached a peak of 95.66%, significantly outpacing inflation.
- For 2023-24, trends are mixed—Table 1 shows a decline of -35.31%, indicating effective cost control, while Tables 2 and 3 continue to experience cost pressures.
- Challenging Years for Revenue vs. Expense Growth:
- In Table 1 (2021-22 & 2020-21), expenses rose more quickly than revenue, raising concerns about profitability.
- Table 2 (2022-23) shows high revenue growth at 98.81%, but expenses also surged, limiting improvements in profitability.
- In Table 3 (2023-24), expense growth outpaced revenue, raising margin concerns.

Profitability & Financial Efficiency Trends:

- In 2023-24 (Table 1), it was a positive year with increased revenue and reduced expenses, leading to improved profitability.
- In 2022-23 (Tables 2 & 3), while revenue grew significantly, expenses were equally high, putting profitability at risk.
- In 2021-22 (Table 1), revenue declined while expenses surged by 76.63%, leading to serious profitability concerns.
- In 2019-20 & 2020-21, expenses frequently outpaced revenue, highlighting financial inefficiencies and shrinking profit margins.

Key Takeaways for Financial Stability:

- There is a need for improved cost management to control the growth of expenses.
- Stronger revenue strategies are essential to ensure sustainable growth.
- A focus on long-term financial efficiency and stability is crucial to prevent profit erosion.

Expense Growth vs. Inflation:

- Expenses have generally increased at a rate faster than inflation, creating cost pressures.
- The most concerning year was 2022-23 (Table 2), where expenses jumped by 22.23% compared to inflation at 5.65%.
- In 2023-24 (Tables 1 & 3), the growth of expenses slowed down relative to inflation, indicating better cost management.
- Table 2 (2023-24) shows that expenses still slightly exceeded inflation, suggesting there is still room for efficiency improvements.

Revenue Growth vs. Expense Growth:

- In several years, expenses rose quicker than revenue, which put pressure on profit margins.
- In 2021-22 and 2022-23, the growth of expenses significantly outstripped revenue growth, raising concerns about profitability (especially noted in Tables 2 & 3).
- In 2020-21, there was strong financial efficiency across all tables, with revenue growth outpacing expense growth.
- In 2023-24 (Table 1), revenue growth exceeded expenses, indicating improved profitability.
- However, in 2023-24 (Tables 2 & 3), expense growth was slightly higher than revenue growth, underscoring the need for ongoing cost management.

Profitability and Financial Efficiency:

- In 2023-24 (Table 1), the financial performance was at its best, with expenses decreasing while revenue increased, enhancing profitability.
- In 2022-23 (Tables 2 & 3), although revenue grew strongly, high expense growth limited profitability potential.
- In 2019-20 and 2020-21, there were moderate inefficiencies, as expenses frequently outpaced revenue, leading to compressed margins.

Key Takeaways for Sustained Profitability:

- Strengthen cost control measures to prevent expense growth from eroding profit margins.
- Focus on strategies to enhance revenue to maintain financial efficiency.
- Keep a close watch on expense trends to ensure profitability improvements across all tables.

Expense Growth vs. Inflation:

- Expenses have grown much faster than inflation, especially in 2023-24 and 2022-23, creating significant cost pressures.
- This increase in expenses may stem from higher operational costs, rising material prices, or spending related to expansion.

Cost Control Trends:

- In 2021-22, there was better cost management, with expenses increasing at a slower rate compared to inflation.
- The year 2020-21 showed strong financial discipline, as expenses actually decreased despite inflation, likely due to cost-cutting efforts and improved efficiency.
- Revenue vs. Expense Growth: - In 2023-24, expenses grew faster than revenues, which poses risks to profit margins and long-term financial health.
- In 2022-23 and 2021-22, revenue growth was either higher than or comparable to expense growth, indicating balanced financial management.
- In 2019-20, revenue and expenses increased at similar rates, suggesting stable financial performance, but ongoing expense monitoring was necessary.

Profitability and Financial Efficiency:

- The year 2020-21 was the most financially efficient, with expenses decreasing while revenue rose, showcasing effective financial management and cost control.
- In 2023-24, profits reached their highest point, but rising expenses present a serious financial risk if not managed properly.
- The pandemic caused significant financial losses in 2020-21, but recovery was strong in the following years.

Financial Risks & Strategic Considerations:

- Increasing costs could undermine profitability, affecting investor confidence and overall financial health.
- In 2023-24, the surge in expansion and operational costs must be controlled to avoid financial inefficiencies.
- It's crucial to balance business growth with cost optimization strategies to prevent financial strain.

- Titan showed the strongest growth in average share price, indicating robust financial performance and investor confidence.
- Trent showed consistent growth, with a strong jump in 2023-2024, indicating a breakthrough in market valuation.
- Adani showed the slowest growth among the other two, reflecting more stable but less aggressive growth.
- Volatility: Trent showed the highest volatility, particularly in 2023-2024, while Titan reflected relatively stable but strong growth.
- TCS showed the highest volatility, which peaked in 2020-2021, indicating higher sensitivity to market movements.
- Infosys and HCL had a pattern of volatility spikes followed by stabilization, reflecting periods of uncertainty followed by market stabilizations.
- Market disruptions in 2020-2021 due to COVID-19 resulted in excessive volatility for all IT companies.
- A spike in volatility in 2023-2024 indicates a rise in market activity and shifts in investor sentiment.
- HDFC registered maximum volatility as it reflected very high fluctuations, which pointed towards exposure to sector and macroeconomic factors.
- Axis Bank registered moderate variations but had strong recovery patterns, indicating stability.
- ICICI Bank was the most stable but closed on a declining trend, pointing towards cyclical trends of the finance sector.

6.2 Suggestions

Retail Sector

Leverage the strong post-pandemic recovery by investing in digital transformation, e-commerce, and omnichannel strategies. Support small and medium-sized retailers to sustain growth through better supply chain management and financial incentives. Monitor consumer trends and inflationary pressures to ensure continued expansion without over-reliance on short-term demand spikes. Retail faces high volatility and inflation risks, making cost control crucial. Companies should adopt automation, dynamic pricing, and better inventory management while diversifying product lines to stabilize expenses. Investors should focus on firms with strong financial discipline.

Titan and Trent present strong investment opportunities due to their consistent growth. However, Trent's high volatility suggests a need for risk assessment before investing.

Adani's slower growth may appeal to conservative investors seeking stability rather than aggressive returns. Investors should monitor Trent’s performance in 2024-2025 to see if its surge continues or stabilizes. Titan and Trent offer great investment prospects because of their stable growth. Yet, the high volatility of Trent indicates that risk assessment is needed prior to investment.

Adani's sluggish growth will suit conservative investors preferring stability over aggressive gains.

Investors need to keep an eye on Trent's 2024-2025 performance to check whether its upsurge persists or settles down.

IT sector

Encourage innovation and diversification to prevent stagnation after the peak contribution in 2022-2023.

Address potential skill shortages by investing in tech education and upskilling programs.

Expand into emerging technologies (AI, blockchain, cybersecurity) to maintain global competitiveness.

The IT sector maintains cost efficiency through AI, cloud computing, and automation, ensuring a strong expense-to-revenue correlation. Reinvesting in R&D and innovation will sustain growth, making IT a safe investment.

TCS investors should be cautious, as it exhibits high volatility. Short-term traders may benefit from price fluctuations, but long-term investors should assess risk factors.

Infosys and HCL show more predictable trends, making them suitable for investors looking for gradual and stable growth.

Given the resurgence in volatility in 2023-2024, investors should watch for industry-wide trends affecting the IT sector.

Finance sector

Promote fintech adoption to accelerate growth beyond the current slow pace.

Implement regulatory frameworks that support financial inclusion and digital banking.

Encourage partnerships between traditional financial institutions and tech firms to modernize services and improve customer engagement.

Finance remains moderately risky but stable, benefiting from effective cost control, automation, and regulatory compliance. Strengthening risk management will further enhance stability, making it a strong investment option. HDFC continues to be high-risk, high-reward and best for investors who can stomach high-risk.

Axis Bank's moderate volatility with a good recovery makes it possibly a better option for investors who want to strike a balance between reward and risk.

ICICI Bank's stability is best for long-term investors, but its recent trend downward means one must conduct more market research before deciding on investment.

6.3 Conclusion

The retail industry has recorded a tremendous growth trend from 2018-2019 to 2023-2024, with its GDP contribution growing dramatically year by year. Although the GDP contribution of the retail industry began modestly at 11-12% between 2018 and 2021, it registered a dramatic increase from 15% in 2021-2022 to 28% in 2023-2024. This remarkable growth points towards a thriving retail sector, possibly fuelled by aspects like heightened consumer expenditure, technological changes, growth in e-commerce, and supportive economic policy. The sharp rise in GDP contribution over the past two years demonstrates that the retail sector has emerged as a vital element in the country's economy and is playing a progressively significant role in GDP growth. The IT industry has witnessed steady and significant growth during the period of 2018-2019 to 2023-2024. Its contribution to GDP has increased continuously from 13% in the period 2018-2019 to 21% during the period 2023-2024, with the fastest growth seen after 2020-2021. The increase is most likely due to higher digitalization, the increasing popularity of remote working culture, technical advancements, and growing international demand for IT services. Although revenue growth is robust, the sector's direct contribution to GDP is lower compared to revenue, indicating high reinvestments, R&D spending, and foreign expansion. Nevertheless, the IT sector remains a key driver of national economic growth, with potential to become a leading economic driver if the trend continues.

The Finance sector has shown consistent growth in GDP contribution over the years, with significant acceleration from 2021-2024. From 12% in 2018-2019, its share has jumped to 27% in 2023-2024. Growth from 2021-2024 is the highest, most likely caused by digital banking innovation, fintech growth, financial inclusion initiatives, growth of the stock market, and foreign investment growth. Whereas total revenue and GDP contribution are positively correlated, direct GDP contribution remains proportionally smaller than revenue, suggesting that the growth of the sector partly results from activities that are not entirely captured in the GDP numbers. Notwithstanding this, the sector's high growth rate, particularly over the last several years, attests to its growing significance within the national economy and suggests much promise if trends persist.

The analysis of Expense Growth Rate (EGR) and Revenue Growth Rate (RGR) across the Retail, IT, and Finance sectors reveals distinct financial dynamics and risk levels in each industry.

The IT sector stands out as the best-performing and most stable industry, with the highest correlation (0.9875) between expenses and revenue, as well as the lowest standard deviation in growth rates. This suggests that investments in technology, R&D, and skilled labor directly translate into revenue growth, making IT a low-risk, high-reward sector. Its consistent performance and resilience to inflation make it the most reliable industry for long-term growth.

The Finance sector closely follows IT, with a similarly high correlation (0.9862) between expenses and revenue. While it carries a moderate level of risk, it remains relatively stable due to its strong fundamentals and steady revenue streams. Economic conditions, interest rates, and regulatory changes influence its performance, making it slightly more volatile than IT. However, its ability to efficiently convert expenses into revenue growth ensures financial sustainability, positioning it as a strong investment option.

The Retail sector, in contrast, is the most volatile and high-risk industry, with the lowest correlation (0.8474) and the highest standard deviation in expense and revenue growth rates. Retail companies face significant fluctuations due to changing consumer preferences, inflation, and competition, making financial performance less predictable. While the sector has growth potential, its high variability and exposure to market risks make it a less stable investment compared to IT and Finance.

The results show that the COVID-19 period had a significant impact on Share prices, meaning businesses saw notable changes due to the pandemic. The interaction between Sector and Company is also significant, indicating that different companies within the same sector performed differently, likely due to business strategies and market conditions. However, the three-way interaction between Sector, Period, and Company is not significant, meaning that while sector and company performance varied, the period did not introduce an additional complex effect across them. This suggests that company-specific factors played a key role in business performance during the pandemic.

The overall reading from the data is that Titan is the best performer, followed by Trent, while Adani trails behind in growth. Investors seeking high returns would prefer Titan or Trent because of their high growth patterns, while Adani can be viewed as a stable but slower-growing stock. The data shows how various companies perform over time depending on market conditions, business strategies, and investor perception.

The study points out different levels of volatility and growth in the retail, IT, and finance industries. Titan and Trent are dominant in the retail industry, with Titan being stable and Trent being highly volatile. In the IT industry, TCS is the most volatile, while Infosys and HCL provide more stable growth opportunities. The finance industry reflects HDFC as highly volatile, Axis as moderately stable, and ICICI as the most stable but lately declining.

For investors, the appropriate stocks to choose are a function of their tolerance for risk—those desiring stability might like Titan, Infosys, and ICICI, while those who are willing to take risks for the potential of greater reward might go for Trent, TCS, and HDFC. The statistics further indicate that sector performance is a strong function of market trends, economic health, and external shocks (e.g., COVID-19), necessitating constant surveillance and judicious investment planning.

SCOPE FOR FURTHER RESEARCH:

1. Sector Comparisons & Economic Cycles: Study how different BSE sectors interact and perform across economic ups and downs.
2. Macroeconomic Impacts: Analyze how interest rates, and regulations affect sectoral performance.
3. Global & ESG Factors: Explore how global trends, sustainability, and governance influence BSE sectors
4. Technology & Market Changes: Study the effects of AI, blockchain, and fintech on sector growth and investor behavior.
5. Risk & Long-Term Trends: Develop better risk-adjusted return metrics and conduct long-term studies on market patterns
6. Further statistical tests can be done to understand how share prices reflected within the sectors.

REFERENCES

1. Prasanth, R. (n.d.). AN IMPACT STUDY OF SELECTED SECTORAL INDICES ON BOMBAY STOCK EXCHANGE OF INDIA-WITH SPECIAL REFERENCE TO S&P BSE SENSEX MASTER OF PHILOSOPHY IN COMMERCE Submitted by.

2. Dr, M., Ganesan, A., & Saravanakumar. (2019). A Study on Financial Performance of BSE/NSE Listed Cement Companies in India-An Annual Growth Analysis. In International Journal of Research in Engineering, IT and Social Sciences (Vol. 09, Issue 03). http://indusedu.org

3. Khan, A. K., & Faisal, S. M. (2022). The Bearing on Indian Frugality and Predicting of Average Crude Oil Rates since 1991 – A Study. Management Dynamics, 19(2), 1–14. https://doi.org/10.57198/2583-4932.1019

4. Polisetty A., Kumar, Dr. D. P., & Susan Kurian, Mrs. J. (2016). Influence of Exchange Rate on BSE Sensex & NSE Nifty. IOSR Journal of Business and Management, 18(09), 10–15. https://doi.org/10.9790/487x-1809021015

5. Rowe, W. G., & Morrow, J. L. (n.d.). A Note on the Dimensionality of the Firm Financial Performance Construct Using Accounting, Market, and Subjective Measures.

6. Khan, A. A., & Javed, S. (2017). A study of volatility behavior of S&amp;P BSE BANKEX return in India: A pragmatic approach using GARCH model. International Journal of ADVANCED AND APPLIED SCIENCES, 4(4), 127–132. https://doi.org/10.21833/ijaas.2017.04.018

7.Impact of GDP and Inflation on Stock Market in India- A case study on BSE Index. (n.d.).

8. AN EMPIRICAL STUDY ON THE PERFORMANCE OF TOP 100 BSE LISTED COMPANIES OFINDIA FOR THE FINANCIAL YEAR 2022-23. (2023). www.ijnrd.org

9. Deep Sharma, G., & Mahendru, M. (n.d.). IMPACT OF MACRO-ECONOMIC VARIABLES ON STOCK PRICES IN INDIA. http://ssrn.com/abstract=1827462

10. Subburayan, B. (2018). Influence of Macroeconomic Variables on Bombay Stock Exchange (BSE) Sensex. https://www.researchgate.net/publication/343787576

11. Reddy, D. V. L. (2012). IMPACT OF INFLATION AND GDP ON STOCK MARKET RETURNS IN INDIA. International Journal of Advanced Research in Management and Social Sciences. www.garph.co.uk

12. Efficiency of Sectoral indices a study with special reference to Bombay Stock Exchange limited. (n.d.).

13. Tarczynska-Luniewska, M., Bak, I., Singh, U. S., & Singh, G. A. (2022). Economic Crisis Impact Assessment and Risk Exposure Evaluation of Selected Energy Sector Companies from Bombay Stock Exchange. Energies, 15(22). https://doi.org/10.3390/en15228624

14. Poddar, A., Narula, S. A., & Zutshi, A. (2019). A study of corporate social responsibility practices of the top Bombay Stock Exchange 500 companies in India and their alignment with the Sustainable Development Goals. Corporate Social Responsibility and Environmental Management, 26(6), 1184–1205. https://doi.org/10.1002/csr.1741

15. Kumar, R., Bhatia, P., & Gupta, D. (2021). The impact of the COVID-19 outbreak on the Indian stock market - A sectoral analysis. Investment Management and Financial Innovations, 18(3), 334–346. https://doi.org/10.21511/imfi.18(3).2021.28

16. Carter, D. A., & Simkins, B. J. (2004). The market’s reaction to unexpected, catastrophic events: The case of airline stock returns and the September 11th attacks. Quarterly Review of Economics and Finance, 44(4), 539–558. https://doi.org/10.1016/j.qref.2003.10.001

17. Kassimatis, K. (n.d.2000). Stock Market Development and Economic Growth in Emerging Economies.

18. Santhi, V. (2016). INDIAN STOCK MARKET-A ROAD MAP INTRODUCTION (Vol. 6). http://euroasiapub.org/current.phphttp://www.euroasiapub.org

19. Ramnarayanan, A. S., & Katoch, I. (2021). Momentum and contrarian effect on investment decision: A study on Bombay Stock Exchange. Anusandhan: The Research Repository of GIBS, 4(1), 5-26

20. Parmar, C., & Parmar, M. (2012). Testing the financial performance: BSE 30. International Journal of Management Research and Review, 2(9), 1498-1506. Retrieved from www.ijmrr.com

21. Manimaran, M., & Anand, N. V. (2017). Analysis on return, risk and volatility of sectoral indices against BSE. International Journal of Current Research and Modern Education, 2(1), 265-269. Retrieved from https://core.ac.uk/display/144865432

22. Sikdar, A. (2021). Sector-wise stock market performance during pre and post-COVID era. International Journal of Engineering and Management Research, 11 (2), 200-205. https://doi.org/10.31033/ijemr.11.2.28&#8203;:contentReference[oaicite:0]{index=0}

23. Bhakar, S. S., Sankpal, S., & Mukherjee, S. (Eds.). (2009). Key drivers of organizational excellence. Excel Books.

24. Sharma, P. P. (2023). An analytical study on impact of various trade investment strategies on corporate performance of selected listed companies of BSE (Doctoral dissertation, Gujarat University). Retrieved from https://www.researchgate.net/publication/389239485

25. https://www.investing.com/

26. https://mospi.gov.in/

27. https://www.rbi.org.in/

28. https://www.bseindia.com/sensex/code/16/

29. https://www.macrotrends.net/

30. http://www.indiabudget.gov.in

[...]

• Course: B.Com. International Accounting and Finance
• Grade: A
• Authors: Radhika P. Y. (Author), Ch. Vaishnavi (Author), Amalya Sunny (Author), Kavya Haridas (Author), Pheaba Pheona (Author), A. Pashipathinath (Author), M. Veera Swamy (Author), M. Arul Jothi (Author)
• Publication Year: 2024
• Pages: 128
• Catalog Number: V1577598
• ISBN (PDF): 9783389140444
• ISBN (Book): 9783389140451
• Language: English
• Tags: BSE sector analysis, Stock market and GDP India, Inflation impact on Indian sectors, Post-COVID market capitalization, Economic contribution of BSE companies